The Senate Finance Committee held an interim study examining state tax incentives for wind power on Tuesday at the State Capitol. Finance Chair Mike Mazzei, R-Tulsa, and Sen. John Ford, R-Bartlesville, who presided over the hearing, issued the following statements after the meeting was adjourned.
It is important for the Legislature to develop policy that will create jobs and encourage economic development for our citizens. In order to achieve that, several industries, including wind power generation, have been offered incentives. I believe it is important to revisit those incentives and ensure the benefits for our citizens and state outweigh the cost, and that was the purpose of Tuesdays study.
The wind industry has grown quickly in recent years, thanks to a five-year ad valorem exemption and a wind power tax credit. That growth is projected to continue. Information provided by the Oklahoma Tax Commission indicates the total cost to Oklahoma taxpayers for these wind power tax incentives was more than $44 million in 2013. Its projected that by 2018 the amount could be more than $66 millionpossibly higher. This study gave us a chance to hear from stakeholders so we can begin to examine whether some of those credits should be revisited. Sen. Mike Mazzei, Finance Chair, R-Tulsa.
Ad valorem taxes are the primary source of funding for many local government services and school districts. Anytime property taxes are exempted, the state then has the responsibility of making up that lost revenue through the Ad Valorem Reimbursement Fund. The cost of the wind power exemption in 2013 was more than $32 million and in 2018, it is projected to be nearly $48 million. While the state puts one percent of income tax collections into the reimbursement fund, that isnt nearly enough to cover the total amount due. As a result, tens of millions of additional dollars must be appropriated to the reimbursement fund. That means fewer resources to fund core government services including education, public safety and healthcare.
I was very pleased that Jeff Clark, Executive Director of the Wind Coalition, stated the industry understands our concerns and is ready and willing to come to the table and work with us to keep Oklahoma competitive for investment while addressing the fiscal issues were facing.Sen. John Ford, Senate Education Chair and Acting Finance Chair for Tuesdays Interim Study meeting.