County opposed to wind tax changes

Published 10:14 am Wednesday, April 29, 2015

The county board came out in strong opposition Tuesday to a state bill that would change how counties receive funds through the energy production tax.

The county will send letters to Gov. Mark Dayton and legislative leaders voicing the county’s opposition to bills that would reduce the wind/solar generation tax from 12 cents to 5 cents per kilowatt hour and replace the funds with state aid and property taxes.

“It could have a large impact on Mower County,” said Commissioner Tim Gabrielson, who serves on the Rural Energy Board and already sent personal letters to legislators.

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Mower has reaped the benefits of its 253 wind turbines through the wind production tax credit, which brought in $9.3 million from 2004 to 2014 — the most of any Minnesota county, according to data from the state’s Department of Revenue and the American Wind Energy Association.

The county has long described the production tax money as an offset to property taxes.

But a bill to change the credit was first introduced March 11 by Sens. John Marty, DFL-Roseville, and Rod Skoe, DFL-Clearbrook. A companion bill has been introduced in the House.

Under the proposed change, Mower would lose $1.27 million in production tax funds, but the money would be replaced by about $648,000 in transition aid and about $624,000 in new property tax funds, which would be paid by energy companies that own the wind tower sites.

While it appears the county would still receive a similar amount in aid, County Coordinator Craig Oscarson told the board there’s doubts about future funding.

“It goes from a very stable funding source to a funding source that is going to sometimes be subject to the whims of the Legislature,” Oscarson said.

Transition Aid is similar to County Program Aid and Local Government Aid, both of which have been cut by the Legislature in the past to make up for budget shortfalls.

Commissioners fear changing the system would make it a less certain source of income for the county.

“Don’t tamper with something that’s working,” Commissioner Jerry Reinartz said.

Commissioners also voiced concern about the effect on the levy, as it would bring the levy from about $18.6 million to $19.2 million.

“It’s raising property taxes, which we don’t want,” Reinartz said.

In 2014, just under $1.6 million went to Mower County based on 2013 energy production — $1.27 to Mower County and about $318,000 was distributed among the townships with towers.

Mower County is set to get more than $1.5 million from wind production tax again this year, according to documents from the Association of Minnesota counties.

The county is primed to receive even more funds through the energy production tax. Renewable Energy Systems Americas is currently constructing the 100-turbine Pleasant Valley project, which will add 88 turbines in Mower.

County officials have estimated that could add another $400,000 through the energy production tax by about 2016 or 2017.

EDF Renewable Energy is working toward building a wind farm with about 25 turbines.

If completed, the EDF project, along with Pleasant Valler, could make for about 360 turbines in Mower County.