Some schools are grateful for wind
Miles of farmland surround the town of Okarche with dozens of spinning wind turbines lining the horizon in nearly every direction.
The arrival of these 500foot wind towers a few years ago wasn’t widely celebrated by the sleepy farming community that had become accustomed to uninhibited vistas. But now that the structures are here, school officials consider it a shield from the type of budget cuts many other schools across the state have faced.
“We would probably be right there screaming with everyone else about the budget if it wasn’t for those (turbines),” said Rob Friesen, superintendent of Okarche Public Schools, which serves nearly 370 students.
While many public school districts across the state have laid off staff, cut programs and made other reductions in response to a state budget shortfall, Okarche has been spared due
to the millions of dollars in local revenue received through property taxes generated from recent wind turbine construction.
Wind turbines began appearing around Okarche a few years ago, but a 95-turbine wind farm came online last year, doubling the district’s property tax valuation and accounting for nearly one third of the annual budget.
Friesen said the tax revenue from wind turbines has minimized the damage from midyear state budget cuts and helped the district do more with a $21 million bond package approved by voters last year to build a gymnasium, elementary school, fine arts center and an agriculture and tech building.
“It increases the amount of money you can go out and bond,” Friesen said. “Without it, we wouldn’t be doing all these projects. Without it, we would have to pick just one of these projects.”
With the funding boost, Okarche is one of 66 districts that generate too much local tax revenue to qualify for the state’s school-funding formula.
For dozens of rural school systems across western Oklahoma, the arrival of wind turbines over the last several years has meant a significant boost in funding.
“It accounts for 10 percent of our budget,” said Robert Trammell, superintendent of the 365-student Cheyenne Public School district in west Oklahoma.
Oklahoma began to see the construction of wind turbines in 2003 and the industry has generated over $134 million in ad valorem taxes since then, according to a study published by the State Chamber of Oklahoma.
Incentives blow away
Most of the tax revenue from wind turbines has been paid by the state through an incentive program to encourage more wind farm construction, which has helped Oklahoma become the third largest wind energy producer in America.
But the exemption will be phased out over the next five years following the Legislature’s vote this year to end the Zero Emission Tax Credit.
One of the wind energy companies operating in the Okarche school district did not receive the tax exemption last year and filed a tax protest when it became responsible for the bill, which has Okarche short nearly $1.5 million pending the protest’s outcome.
“I would expect to see more of this,” Canadian County Assessor Matt Wehmuller said about the likelihood of protests from wind companies as they become responsible for their own taxes. “The protests depend on who is footing the bill.”
A wind farm near Cheyenne is coming off tax exemption status this year, which has the superintendent expecting a dispute.
“Their financial structure and strategy is changing, so I would anticipate they would challenge their valuation and protest, ”Trammell said.
While schools could start to take a hit with wind energy companies protesting their tax bills, schools will also see bonding capacity decline due to depreciation of current wind turbines.
That means the current boost in funding may float districts for several years, but will eventually fall back to earth.
Minco Superintendent Kevin Sims said wind turbines built over the last several years have nearly tripled his district’s valuation, allowing for a new high school to be built in 2015.
“We wouldn’t have been able to do that without the wind companies,” Sims said.
But Sims said he is worried about the $1 million in tax payments owed to the school this summer through the state exemption program.
“With the budget fiasco going on at the state Capitol, it worries me that we may not get that payment in June,” Sims said. “That could put us in a negative balance in the general fund.”
Depreciation and changes in the wind energy taxes will mean a decline in some revenue for schools, although wind energy producers believe more wind farms will continue to come online over the next several years.
“You have to be smart in how you manage the money because of the way things change,” Friesen said. “But right now, it’s one more source of revenue that really helps us a lot.”