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Southern Minnesota schools' windmill windfall is at risk; Tax benefit expiring under new law

The Sargeant, Minn., resident said many of his fellow farmers signed agreements to have the wind turbines on their property, thinking they were helping their local school districts. But starting July 1, those dollars will no longer mean a boost in local school funding. And that has Gronseth upset. "The more I talked to people about this I just said, 'Enough is enough.' So I offered to help," he said.

From his turkey farm, Rande Gronseth can see plenty of wind turbines spinning in the breeze.

The Sargeant, Minn., resident said many of his fellow farmers signed agreements to have the wind turbines on their property, thinking they were helping their local school districts. But starting July 1, those dollars will no longer mean a boost in local school funding. And that has Gronseth upset.

"The more I talked to people about this I just said, 'Enough is enough.' So I offered to help," he said.

So Gronseth traveled to St. Paul last week to testify before a House education committee asking that the wind revenues be restored.

"There are guys negotiating, as we speak, windmill projects, and they are under the impression they are helping school districts, but it's not," he told committee members.

Instead of paying property taxes, wind farms are taxed based on how much energy they produce. This wind energy production tax is then divided among local governments, with 80 percent going to the county, 14 percent to the township and 6 percent to the school district where the wind turbine is located. Last year, this tax generated $2.4 million statewide with more than $146,000 going to school districts.

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From his turkey farm, Rande Gronseth can see plenty of wind turbines spinning in the breeze.

The Sargeant, Minn., resident said many of his fellow farmers signed agreements to have the wind turbines on their property, thinking they were helping their local school districts. But starting July 1, those dollars will no longer mean a boost in local school funding. And that has Gronseth upset.

"The more I talked to people about this I just said, 'Enough is enough.' So I offered to help," he said.

So Gronseth traveled to St. Paul last week to testify before a House education committee asking that the wind revenues be restored.

"There are guys negotiating, as we speak, windmill projects, and they are under the impression they are helping school districts, but it's not," he told committee members.

Instead of paying property taxes, wind farms are taxed based on how much energy they produce. This wind energy production tax is then divided among local governments, with 80 percent going to the county, 14 percent to the township and 6 percent to the school district where the wind turbine is located. Last year, this tax generated $2.4 million statewide with more than $146,000 going to school districts.

But in 2007, the Minnesota Department of Education and lawmakers approved eliminating the wind tax benefit for schools. Any wind tax revenue districts received would be deducted from their state education funding. That change would take effect July 1. Department staff had told lawmakers at the time that the wind tax contributed to funding inequity among schools.

Rep. Robin Brown, DFL-Austin, is sponsoring a bill aimed at restoring the funding. Fellow Austin Democrat, Sen. Dan Sparks, is sponsoring a similar measure in the Senate. Both bills have bipartisan support.

Brown told committee members that the loss of the dollars will be a major hit to school districts across southern Minnesota.

"Schools in southern Minnesota that had anticipated the money had ramped up their programs based on the money and now it is going to be gone," she said.

Grand Meadow Public Schools was among the districts banking on this money. Superintendent Joe Brown - Rep. Brown's husband - testified that his district had been expected to receive more than $29,000 from the wind tax. Relying on this added money, the district had established a goal of having all students complete four years of math and science, starting with the class of 2010. But without this money, the district will have to lay off a full-time teaching position. The district has already cut 11 positions to balance its budget.

"My district cannot afford to have anticipated revenue taken away from them," the superintendent said.

No one testified against the bill during the hearing. Minnesota Department of Education Spokeswoman Christine Dufour said the department is "currently in the process of reviewing the legislation." Alex Carey, a spokesman for Republican Gov. Tim Pawlenty, said that while the wind tax change is not included in the governor's budget proposal, Pawlenty "is open to discussing the removal of the deduction for school districts with the Legislature."

A similar measure won approval in the House and Senate last year, only to be stripped out from a bill in the last hours of the session.

Rep. Pat Garofalo, lead Republican on the committee, told members it is important to keep in mind that there is going to be an "explosion" in wind tax revenue as more wind farms are built to meet the state's new renewable energy standards.

Indeed, the total revenue from wind taxes is expected to climb by 10 percent every year, reaching $3.2 million in three years. There are other such taxes that benefit schools. On Minnesota's Iron Range, some tax money from taconite producers goes to local school districts.

Committee members agreed to consider including the measure as part of a larger education bill.

Gronseth said he already knows of farmers who have turned down wind turbine contracts after learning that schools would no longer benefit. He said this law change is about keeping the state's promise to school districts and farmers.

Farmers, he added, "saw a way to help their local schools districts, and in 2007, it was simply taken away."


Source: http://www.twincities.com/e...

MAR 22 2009
http://www.windaction.org/posts/19492-southern-minnesota-schools-windmill-windfall-is-at-risk-tax-benefit-expiring-under-new-law
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