Today, Jeff Clark, Executive Director of The Wind Coalition presented testimony to the Oklahoma Senate in response to an interim study initiated by that body. The study is designed to review tax incentives currently made available to promote wind energy development in Oklahoma. A copy of the remarks as prepared is available here: 2014_10_20 – Wind Coalition Testimony in Oklahoma – Delivered
The Coalition made plain, as it did in testimony to the House of Representatives on October 1, 2014, that it is willing and eager and eager to work with lawmakers to develop improved incentive structures that achieve three critical goals. The Wind Coalition seeks to:
- First, help Oklahoma remain competitive as a location for capital investment and job creation.
- Second, help the legislature structure incentives that add predictability to the state budgeting process, eliminating anxiety for legislative budget writers and appropriators.
- Third, create a long-term tax structure for the state that allows wind energy to continue to contribute to the state’s economic development.
The remarks as presented to the Senate may differ from the prepared text and do not include remarks made during the question and answer portion of the presentation.
Following the hearing, the following statements were issued by Senate Finance Chairman Mike Mazzei (R-Tulsa) and Senate Education Chairman John Ford (R-Bartlesville):
“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 Tuesday’s 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. It’s projected that by 2018 the amount could be more than $66 million—possibly 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.”
– Senator Mike Mazzei
“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 isn’t 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 we’re facing.”
— Senator John Ford