Budget & Tax
Trent England | September 27, 2017
Cost Avoidance #2-4: Cut cronyism for wind companies
#2, 3, 4) Cut Cronyism for Wind Companies: Cap payouts and repeal their sales tax exemption Capping annual payouts of the Zero-Emission Tax Credit and the ad valorem reimbursement for wind energy companies at $12.5 million each, and repealing the sales tax exemption for wind turbines, could save more than $72 million in the current budget year and more in future years. The legislature has made some progress unwinding this cronyism, as we noted in May.
A law signed recently by Gov. Mary Fallin will end Oklahoma’s zero emissions tax credit for the wind industry on July 1, 2017. House Bill 2298, by House Speaker Charles McCall and Senate President Pro Tempore Mike Schulz, accelerates the sunset for new zero emission tax credits for wind energy, ensuring no new projects after July 1 will qualify.
This is good news for Oklahomans. HB 2298 will save taxpayers hundreds of millions of dollars. The tax credit was designed to incentivize the wind industry in Oklahoma, but it quickly grew into a massive drain on our state’s budget by allowing foreign and out-of-state wind developers to cash in at the expense of Oklahoma taxpayers.
When Gov. Frank Keating signed legislation in 2001 creating the tax credit for wind energy, it was believed the credit would cost the state less than $2 million annually. In 2014, however, the wind industry claimed $113 million in wind tax credits for production. That’s more than a 5,000 percent increase!
While Oklahomans work hard to make ends meet, wind energy companies continue enjoying lucrative subsidies and tax breaks at the expense of taxpayers. The sunset for zero emission tax credits is a great first step, but now taxpayers need to see greater steps from lawmakers. Oklahoma simply can’t afford to keep subsidizing the already prosperous wind industry.
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David and Ann Brown Distinguished Fellow
Trent England is the David and Ann Brown Distinguished Fellow at the Oklahoma Council of Public Affairs, where he previously served as executive vice president. He is also the founder and executive director of Save Our States, which educates Americans about the importance of the Electoral College. England is a producer of the feature-length documentary “Safeguard: An Electoral College Story.” He has appeared three times on Fox & Friends and is a frequent guest on media programs from coast to coast. He is the author of Why We Must Defend the Electoral College and a contributor to The Heritage Guide to the Constitution and One Nation Under Arrest: How Crazy Laws, Rogue Prosecutors, and Activist Judges Threaten Your Liberty. His writing has also appeared in the Wall Street Journal, USA Today, Washington Times, Hillsdale College's Imprimis speech digest, and other publications. Trent formerly hosted morning drive-time radio in Oklahoma City and has filled for various radio hosts including Ben Shapiro. A former legal policy analyst at The Heritage Foundation, he holds a law degree from The George Mason University School of Law and a bachelor of arts in government from Claremont McKenna College.