House whips up new wind-tax plan

ST. PAUL -- Austin Democrats are hammering out a compromise with party leadership that would boost wind tax revenue for townships at the expense of school districts.

Reps. Robin Brown and Jeanne Poppe have been fighting to restore a wind tax benefit for schools set to expire on July 1. Last year, Minnesota schools received $146,000 from the wind energy production tax.

Currently, the wind tax is divvied up among local governments, with 80 percent going to counties, 14 percent to townships and 6 percent to school districts. In 2007, lawmakers approved a change that would subtract a school district's wind tax money from the amount of state aid it would receive beginning July 1. Under the compromise, the school district's 6 percent would instead be given to townships.

Both Poppe and Brown say they would rather see the schools keep the money; the next-best alternative is to make sure the money stays local instead of going to the state.

"At least it would all stay in the area," Poppe said.

Unfair benefit?

The fight over wind tax dollars has generally pitted rural lawmakers against their urban and suburban counterparts. Some legislators argue it is unfair for some schools to reap the tax benefits of wind farms while others are left out. Rural lawmakers argue that the wind tax is in lieu of property taxes and it is only fair that districts get tax dollars from these rural economic developments.

Adding to the tricky negotiations is the state's $4.6 billion budget deficit.

Republican Gov. Tim Pawlenty's spokesman has said the governor is willing to discuss restoring the wind tax benefit to schools. Republican Rep. Randy Demmer, of Hayfield, said he would prefer to see the school money restored but is open to the House compromise because at least the money would stay in the area. He said it is clear that the Democrats' urban leadership is to blame for taking the revenue away from schools.

"I think this (compromise) is an acknowledgment that this has been an urban House leadership issue, and the fact that we have rural Democrats working on this has been a benefit," Demmer said.

House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said it is more common for this type of tax to be distributed only to counties and townships. Boosting the tax receipts for townships, Kelliher said, would benefit a broader group of residents. She said lawmakers are also considering providing temporary transition aid to school districts that had been counting on getting wind tax money over the next two years.

"There is not exactly a lot of money around here. But we're looking to try and really keep the commitment that originally was made. It may have to be in a little bit of a different way," she said.

Senate approach

In the Senate, lawmakers have taken a different approach. They approved an education bill that would let school districts keep half the wind tax money and send the rest to the state. Sen. Dan Sparks, DFL-Austin, who supported a bill to restore the wind tax benefit, said he voted against the education bill partly because of the wind provision. He said he could not comment on the House compromise until he sees the bill. Poppe is expected to introduce the bill this week.

Grand Meadow schools Superintendent Joe Brown, husband of Rep. Robin Brown, has criticized efforts to take the wind tax money away. His district expected $30,000 in wind tax revenue this year and up to $50,000 next year. He said losing the money would be tough for the district, which made $340,000 in cuts last year, but the House compromise is better than nothing. He said it could at least benefit school districts indirectly by giving townships more money to fix roads that can cause school bus maintenance problems.

"I would much rather the money come directly to the schools," Brown said. "But in lieu of that, this is probably the best compromise we're going to get."