Wind tax credit may be due for ‘burr haircut,’ Senate leader says
When Gov. Mary Fallin signed a bill last May to end a property tax exemption for new wind power developers, she said the industry still would benefit from a big tax credit.
It still would have millions of dollars in benefits from the zero-emission tax credit, tied to pollution-free energy.
Now that may be on the chopping block, too, as the state struggles to fill a $1.3 billion budget hole.
A measure passed by the Senate Finance Committee would place a moratorium on nearly two dozen tax credits, including the zero-emission credit.
Senate President Pro Tem Brian Bingman said in a meeting with reporters Thursday that although that legislation is still under review, the credit needs a “haircut.”
“Some feel it probably needs a burr haircut, but some sort of haircut, yes,” Bingman said. Other tax credits also should be limited, he said.
An Oklahoma Tax Commission report shows the credit cost the state $27.3 million in 2013, the last year from which statistics are available. The industry has an increasing presence in Oklahoma, and that number likely has increased.
Jeffrey Clark, executive director of The Wind Coalition, said a process has been set up to review tax credits in a thorough way, with a commission to release a report in December.
He said that, given legislation phasing out a property tax exemption for the industry last year, it’s important to be judicious with consideration of further cuts.
The zero emissions credit is set to sunset, or end, in 2020 in any case, he said.
“We are on a path to be incentive-free in 2021,” Clark said.
While his industry has seen strong growth in Oklahoma, the oil industry is suffering through a major downturn.
“One of the biggest factors affecting the Oklahoma budget are the natural gas prices,” Bingman said. “Anything we can do to encourage the consumption
of natural gas, I think the Oklahoma economy, the Oklahoma state budget would realize more from a strong natural gas industry than any other source.”
In a news conference, House Democratic leader Scott Inman said it’s not fair to place a moratorium on the zero emissions credit.
“We believe the folks in the wind industry basically had a bait and switch,” he said. “They were lied to in the sense they were told ‘If you’ll negotiate away one of your credits, we’ll protect your second.’ Well, all they did was kill one, and they’re coming back for
the second one this year.”
He also criticized those discussing a moratorium on tax credits that provide significant assistance to middle- and lower-income people, like the child care tax credit, which costs $27.1 million a year; sales tax relief, which costs $41.1 million; and the earned income tax credit, which also costs $41.1 million.
“This governor refuses to roll back $157 million worth of income tax cuts,” Inman said. “As long as she doesn’t put the income tax back on the table, we will stand opposed to any other tax increases leveled at middle-class families.”