Saturday, June 18, 2016

Taxing the Wind

Wyoming is the only state in the Union to tax the wind. Some legislators want to raise that tax by 300 to 400 percent.

High Country News reports House Revenue Committee Michael Madden of Buffalo doesn’t think wind is paying its fair share compared to oil, gas, and coal.

Rep. Madden says he “can’t see any fundamental reason to treat one different from another.” The Republican added, “This isn’t my first rodeo on this type of thing.” However, his rationale leads some to believe it might just be.

Fundamental differences justify different treatment. Wind is a renewable energy source that will always be with us. Fossil fuels are assets that are gone forever once extracted and hauled away.

Second, one is a fossil fuel whose days are numbered despite the fervent denial of Wyoming pols. Wind gives the state a chance to reboot and diversify its economy unless Madden and his colleagues kill the Goose that wants to lay the Golden Egg.

Third, with additional taxes added to the current one-of-a-kind tax on Wyoming’s wind, developers can easily find just as much wind blowing untaxed in any number of other states.

Madden’s argument leaves those of us who were around the state house when the severance tax was first enacted shaking our heads. The severance tax was imposed on fossil fuels because lawmakers knew they were not renewable assets. The mining companies took them out of the ground and hauled them off to other states where they made a fortune for others for decades without leaving the state much of anything.

In the 60s and 70s, Wyoming decided that if they were going to haul away these valuable assets the companies should leave behind a few bucks. Many of us believe the mining companies never paid their fair share despite the size of permanent and rainy day funds largely attributable to severance taxes and federal royalties.

Taxing a renewable source like the wind is altogether different. That’s why Wyoming is the only state doing it. Floating a proposal to tax wind even more has already dampened plans for further development.

Power Company of Wyoming, a Denver-based wind developer, has put plans to build 1,000 wind turbines in Carbon County in limbo as a result. That means a loss, not only in wind tax revenue but also in new, good paying jobs, sales and use taxes, and the related economic activity the project would generate in one of the state’s poorest counties.

(I know. I don’t like the look of those windmills across the horizon. But I like climate change even less.)

I well remember the days when coal, uranium, oil and gas company lobbyists threatened legislators who thought their companies should pay a fair severance tax. They warned that if we raised their taxes, they’d take their business somewhere else. We didn’t believe them. They didn’t leave. After all, where were they going to go that had as much of what they wanted with lower taxes?

Wind is not the same market.

It’s nonsense to hope that a tax on wind can or should be raised high enough to replace revenues lost to weakening fossil fuels markets especially when the same legislators refuse to tax tobacco and booze fairly and turn down ten-of-millions by defeating Medicaid expansion.

So, why impose more taxes on wind? Revenge. At least one legislator feels erroneously that renewable energy has harmed Wyoming’s coal producers. He’s out to get even.

State Sen. Ogden Driskill, a Republican whose gerrymandered district extends to parts of three northwest Wyoming counties, opposes federal tax subsidies for wind. He advocates for what he calls “a level playing field” between renewables and fossil fuels.” Why? “I really don’t believe in the federal subsidy,” he said. “I feel it has had a detrimental effect on our very competitively priced energy in Wyoming.”

That is the attitude that got us where we are. It’s what will keep us there unless more visionary people win seats in the legislature this fall. 

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