School Funding Could Be Hurt By Depreciation Of Wind Farms
The nonprofit Oklahoma Public School Resource Center recently released a data survey on how the wind industry funds school districts.
The report shows there is a sizeable bump in property tax revenue when a wind farm is built. However, the state aid formula fluctuates when a district gets high revenue from other sources, The Journal Record’s Dale Denwalt reports:
In the small Canadian County town of Calumet, wind energy has helped the school district ratchet down its reliance on state aid, which is measured and doled out based on demographics of students who attend. The demographics determine whether a district gets additional, or weighted, money for each student. State aid can be replaced by a great enough level of ad valorem revenue. Just 1 percent of Calumet Public Schools’ income is from the state aid formula. When the turbines begin losing value as personal property, state aid will fill the gap.
Andy Evans, who is the Resource Center’s Finance Director, said the fluctuation lasts about nine years before depreciation begins to affect the revenue streams. He said as the valuation of a turbine falls, the state aid formula has to pick up the slack.
In a time when the state has less money to spend, that worries school administrators.
Chuck Hood, Calumet High School principal, said he hasn’t seen a decline yet but realizes depreciation will affect the district at some point. When that happens, he said he hopes the state has the money to equalize the result. In the meantime, Hood said the district is technically getting wind energy ad valorem revenue from the state through a reimbursement fund because of a five-year tax credit. “What I’d like to know is how good it is when the state quits paying for it and the wind turbine people actually have to start paying their own taxes, if the money is still good,” Hood said.
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