Claims that politicians vote based solely on who gives them the most campaign cash are typically overblown. But one can understand why some Oklahomans might connect those dots when it comes to the wind industry’s recent activity.
American Wind Action, an advocacy group, reported spending $178,693 on radio and digital ads touting 15 legislative candidates. Most of that money was spent defending representatives who opposed efforts to reduce tax breaks and state payments to the wind industry. Of the 15 candidates receiving wind industry support, 12 were incumbent legislators.
In April, lawmakers considered a measure to end the issuance of refundable tax credits to wind power producers. If the amount of a refundable tax credit is greater than the amount of taxes owed, the state pays the difference to the entity possessing the credit. Thus, taxpayers directly pay wind farms to come to Oklahoma. And Oklahoma is one of the few states with a major wind power presence that hasn’t at least capped such credits.
It’s been estimated the wind power credit costs around $70 million annually. Advocates of repeal estimated ending the subsidy would save Oklahoma state government $500 million to $750 million over the next 10 years.
The repeal effort narrowly passed the House, but didn’t clear the Senate. Some of those who opposed the repeal are reaping support from wind power companies. That’s not surprising.
What is notable is that lawmakers took a far different approach to fossil fuel energy producers. Year in and year out, legislators have chosen to raise taxes on fossil fuel energy sources even as they protect handouts to “green” energy producers.
In 2014, the Legislature doubled the tax rate on new horizontal wells. In 2016, it capped oil and natural gas rebates for economically at-risk wells, increasing taxes an additional $120 million. In 2017, lawmakers passed another $141 million in taxes on oil and gas by ending all gross production tax rebates and raising to 4 percent the gross production tax on wells drilled when the pre-2014 rate applied. In 2018, they voted again to raise the gross production tax, adding $204 million to the cost of drilling here.
Yet fossil fuel production creates far more permanent jobs and has far greater positive economic benefit that do wind farms. If tax increases on oil and gas were necessary to fund teacher pay raises, as legislative leaders claimed, then the same thing was true of refundable tax credits for wind power.
Some lawmakers said the state made a commitment to wind power companies with passage of refundable tax credits, and that reneging would hurt with other business recruitment efforts. Fair enough. Yet this was equally true of lawmakers’ decision to raise the incentive rate provided to drillers before its promised expiration date (and long after producers responded by investing millions in Oklahoma).
The two situations are largely alike, yet Republican leaders took very different approaches to the two industries. While it’s fair to wonder if campaign funding played a role, the bigger question may be whether the disparate treatment suggests some Oklahoma Republicans have quietly joined Democrats in prioritizing “green politics” over economic development and prudent state budgeting.
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