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Incentive Evaluation Commission To Look At 'Wind Tax,' Other Credits Ahead Of Report

The Arbuckle Mountain Wind Farm in southern Oklahoma.
Brian Hardzinski
The Arbuckle Mountain Wind Farm in southern Oklahoma.

State officials will consider recommending cuts to tax credits Tuesday as they look for a way to bring more money into the state.

Oklahoma's Incentive Evaluation Commission is meeting at 1 p.m. at the state Capitol to discuss what will go into a final report it plans to submit to lawmakers and Gov. Mary Fallin next month.

There are 11 tax incentives on the Commission's agenda, including the Zero-Emissions Tax Credit. It's typically referred to as the "wind credit," although it also includes solar and geothermal electricity generation, eCapitol’s Shawn Ashley reports:

Richard Mosier, with Wind Waste, a group that opposes wind incentives, noted how much the state revenue loss has grown since the incentive was implemented in 2001, $2 million to $113 million. Mosier said a 20 percent increase in the level of electricity generated by wind also is on the drawing board, which would increase the amount of revenue lost to the incentive. Mosier said the incentive was created to help the state increase its use of renewable energy and to generate economic activity in excess of its costs. "The PFM report shows it is not doing the latter," he said, noting the state passed its renewable energy goal several years ago. . . . Commissioner Cynthia Rogers said she, too, believed some potential benefits were left out the report regarding solar and geothermal power generation. She also reminded the commission it had decided to leave out potential environmental benefits because they were difficult, if not impossible, to measure.

Senate President Pro Tem-designate Mike Schulz, R-Altus, said it's possible lawmakers could end up dividing up that tax credit.

"Solar is one that's really starting to accelerate and ramp up at a pretty rapid rate,” Schulz said during a press conference last week. “And I think it's a little too early to process, to know if we're going to lump them all together, or if we're just going to take wind, split it out, and leave the others to be incentivized for a few more years."

Schulz says the Incentive Evaluation Commission report is a good starting point, and formal numbers will help lawmakers figure out if tax credits are a good deal for the state or not.

The consulting firm the PFM Group says the zero-emissions tax credit is too generous, and recommended the Commission either cap it, or end it by 2018. That's three years before the current sunset date of January 1, 2021. The most recent data from the Oklahoma Tax Commission says the credit cost the state 59 million dollars in 2014, about half of the $113 million revenue impact figure, according to The Oklahoman’s Rick Green:

The two numbers differ because the Tax Commission looks at tax credit costs, while the consultant report looked at total tax credits claimed. Not all credits claimed result in immediate costs to the state, depending on the tax liability of the claimant, but could result in future costs. Dave Bond, of the conservative lobbying group OCPA Impact, said any savings on tax credits could be important as legislators look for money to fund a potential pay raise for the state’s more than 40,000 teachers. Schulz also said teacher pay raises will get serious attention in next year’s legislative session.

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Brian Hardzinski is from Flower Mound, Texas and a graduate of the University of Oklahoma. He began his career at KGOU as a student intern, joining KGOU full time in 2009 as Operations and Public Service Announcement Director. He began regularly hosting Morning Edition in 2014, and became the station's first Digital News Editor in 2015-16. Brian’s work at KGOU has been honored by Public Radio News Directors Incorporated (PRNDI), the Oklahoma Association of Broadcasters, the Oklahoma Associated Press Broadcasters, and local and regional chapters of the Society of Professional Journalists. Brian enjoys competing in triathlons, distance running, playing tennis, and entertaining his rambunctious Boston Terrier, Bucky.
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