Dive Brief:
- A nearly-$600 million budget shortfall has landed some green energy subsidies on the chopping block in Kansas, where legislators are considering shortening property tax breaks for wind power facilities.
- Opponents argue the subsidies are necessary because the wind industry is a young, environmentally friendly industry, but others argue that a 10-year limit on property tax exemption would allow projects to be developed while still boosting revenues.
- Some also believe property tax exemptions for wind farms has driven up taxes for state residents, and may also be unfairly boosting the price of traditional generation.
Dive Insight:
Kansas Gov. Sam Brownback (R) has made headlines nationwide for his aggressive spending cuts and ensuing budget shortfalls, and now it looks like renewable energy incentives could be on the chopping block to fill holes in the state's finances.
Since 1999, the Lawrence Journal-World reports, the industry has been receiving a lifetime exemption on property tax. But with Kansas facing a budget shortfall, those incentives are now being reconsidered.
"Giving property tax exemptions to private companies, regardless of the rationale, only increases
everyone else’s property tax. Local government spending is not curtailed to absorb the exemption," Dave Trabert, president of the conservative think tank the Kansas Policy Institute, said in written testimony for the Kansas House Taxation Committee.
Trabert said payments on tax-exempt wind farms for 2013 totaled $8.6 million while the state's department of revenue estimated the tax on those farms would have been be $117.1 million. "If these wind farms were paying their fair amount of property tax, local government could reduce taxes on everyone else by $108.4 million," he said.
Legislators in Kansas have recently tried but failed to repeal the state's renewable portfolios standards. They voted twice last year, and narrowly lost, to roll back the standard, which climbs to 15% in 2015 and 20% in 2020.
