Wed 17 Feb 2010
Steps Toward Taxing Wind Energy
Posted by Geoff O'Gara under Legislature
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Wyoming took a big step yesterday toward becoming the first state to tax wind energy production – not property tax, not severance tax, but an excise tax, a duty on the megawatts produced by wind turbines. The House passed the tax on first reading yesterday after a legislative committee lowered the rate from $3 per megawatt to $1 per megawatt, and delayed implementation until 2012. Even then, new wind farms will have three years to generate revenue before they start to pay.
If the wind tax passes – and it has two more readings in the House and a trip to the Senate before it’s final – it will likely be coupled with other bills that more strictly regulate wind developments, requiring bonding for decommissioning, setbacks from property lines, and permits from county governments or the Industrial Siting Council.
With the reduced tax, Rep. Dan Zwonitzer (R-Cheyenne) tried to redirect revenues to county governments – the entities most hard-hit by wind development – rather than the 60-40 split between the state and local governments in the original $3 tax bill. That failed, and under the current bill counties and the state will share the tax proceeds.
Several powerful legislators – Rep. Pete Illoway (R-Cheyenne) and Speaker Colin Simpson (R-Cody) among them – argued for “caution”, saying the tax idea needed more study before action. Earlier in the day, Gov. Dave Freudenthal said at a press conference that delaying for a study “is sending out the announcement for the funeral date,” and decried the “full fledged assault of lobbyists” trying to block the wind tax.
Rep. Tom Lubnau (R-Gillette), a leader on energy issues, said the wind tax was “the first time in my lifetime” taxes could be diversified away from fossil fuel severance taxes, and Rep. Kermit Brown (R-Laramie) said wind lobbyists would “dilly dally” and try to put it off more and more: “Let’s get started.”
If Gov. Freudenthal thinks delaying to study an issue is “sending out a funeral notice”, perhaps that’s what he’s trying to do with the hike in retirement contributions for state employees. While the governor acknowledges that the retirement system is in trouble – not disastrous trouble, but serious enough to require a bigger contribution by both the state and employees – he asked the legislature to delay a year before state employees are asked to kick in a small contribution.
Currently, state employees don’t pay a cent toward their retirement. They’re supposed to pay half of the 11.4 percent of wages that go into retirement – with the employer, the state, picking up the other half. But since 2004, the state has paid the employee’s share as well. Quite the deal (full disclosure: my paycheck comes from the state, through Wyoming PBS, though I’m not in the state retirement plan).
To make the retirement fund more solvent, an additional 2.8 percent of wages needs to go in, and the proposal is to have the employees actually pay their half of that increase – about 1.4 percent of what they earn. Sen. Mike Massie (D-Laramie) joins the governor in arguing for a delay – hopeful, apparently, that they can cushion the blow particularly for young, low-salaried employees, and maybe another solution will come forward over the next year.
The Senate isn’t buying it. “Suck it up and take care of it now,” said Sen. Phil Nicholas (R-Laramie), “or ignore it and the problem cascades to larger and larger problems.”
The bill is moving forward in the Senate. No funeral notices have been posted. I’m cancelling next year’s trip to Morocco.


