Wind Energy Production Tax Should Benefit Communities

April 27, 2009 - 4:36pm -- Anonymous

“Local communities and counties and school districts aren't getting the benefit that we are entitled too,” explains David Benson in a recent newspaper article regarding problems with the wind energy production tax in Minnesota. Benson is a Nobles County commissioner, legislative chairman for the Southwest Regional Development Commission, and on the Windusty board of directors.

The article on “Production tax makes wind worthwhile” in the Rochester Post-Bulletin outlines how the tax established in 2002 has benefited counties, townships, and school districts that have wind farms in those counties. Dodge county has received $91,667 in wind energy production taxes since 2004, and Mower County has estimated $861,387 from 186 towers for 2009. In our current economic climate with losses in revenue and cost-cutting, this has provided critical tax relief for rural communities.

However, limits on county tax levies were enacted during the 2008 Minnesota Legislative session by reclassifying the production tax as general revenue. Now counties are finding that they may end up losing money on their infrastructure investments for wind farms.

“We had to provide roads for the big machinery that came in, we provided emergency medical services or fire, if there are any needs like that. Because of the costs we were seeing to the community, we needed some benefits,” explains Benson. “Local communities and counties and school districts aren't getting the benefit that we are entitled too.”

Some legislators tried to introduce bills to ammend the tax levy limits to address the funding issues for counties and schools, but they could not get any changes through the committee process. While the Minnesota legislature struggles with solving a $6.4 billion budget deficit for the 2010-2011 biennium, rural communities may suffer the loss of an economic benefit that they had placed their hopes upon.