HB 2298 phases out zero-emissions tax credit sooner
The Senate has given final legislative approval to a measure to end an overly expensive tax incentive to the wind industry and help staunch the state’s fiscal wounds.
House Bill 2298 would sunset the zero-emission tax credit program on July 1. Under current law, the incentive is set to stay on the books for windmills that were put in business through 2021.
The tax credit is expensive and the state doesn’t get enough in return for the money. Since the zero-emission tax credit was created, its use grew from nearly $3.7 million in 2010 to more than $113 million in 2014. While wind energy is clean and renewable, it creates relatively few permanent jobs and most of the power (and the profits) go out of the state. The tax credits have a 10-year life, meaning, even with HB 2298, the state will be paying off this corporate welfare for years to come.
Whenever we speak against the unaffordable giveaways to international Big Wind companies we get static from those who want to know why we don’t also push for heavier taxation on the petroleum industry in Oklahoma. We do ... and have for years. The current effort by some of the biggest oil companies in the state to convince lawmakers to make their operations more profitable through the broader legalization of long lateral drilling gives the state good leverage for pushing up the state’s severance tax rates to a more reasonable and historically justified level.
But it’s worth pointing out that, in contrast to the wind industry, the petroleum industry pays taxes on the energy it produces and creates an enormous number of jobs and wealth inside the state. Regardless of what happens with petroleum taxes, it’s clear that the zero emissions tax credit is a bad deal for the state, and we can’t afford to continue it.
Gov. Fallin should sign HB 2298 and lawmakers should turn their attention to raising the severance tax rate on petroleum and creating a comparable severance tax on wind-generated electricity.