Ill wind blows as schools lose funding source
What is the wind energy production tax?
Since 2002, wind farms have been charged a wind energy production tax based on how much energy is produced. Wind farms that generate more than 12 megawatts are charged 0.12 cents per kilowatt hour.
Where does the tax money go?
The tax dollars collected are divvied up as follows: 80 percent to the local county, 14 percent to the township and 6 percent to the local school district.
A new policy approved last session by lawmakers means any wind tax money received by school districts after June 30, 2009, must be subtracted from the state aid they receive.
What does that mean for local districts?
Instead of getting the additional tax dollars, districts will not receive any extra money from the tax.
Superintendent vows to fight loss of wind-energy production taxes
By Heather J. Carlson
GRAND MEADOW — Sitting on Grand Meadow Superintendent Joe Brown’s desk is a miniature replica of a wind turbine. It’s modeled after the towering wind turbines that spin within view of the school’s athletic field.
For the district, each of those wind turbines represented a new funding source — thanks to the wind energy production tax. Brown even went so far as to testify at a public hearing in favor of a new wind farm to support new dollars for his school district. But a measure passed by the Minnesota Legislature last session means districts no longer will benefit from the tax.
"Our farmers were promised this (wind tax for schools) was going to happen, and now the state’s reneging on their promise," Brown said.
Brown has launched a campaign to get the policy rescinded next session. He said he has written 23 legislators asking for their support, in addition to contacting the governor’s office and the Department of Education. He said his wife — Rep. Robin Brown, a Democrat from Albert Lea who serves on several education committees — also is looking to get the measure changed.
"I am upset," he said. "Anytime you take money away from my kids in Grand Meadow, it’s going to upset me." But officials with the Minnesota Department of Education argue the wind production tax promotes inequity among schools — allowing schools that happen to have wind farms to get more dollars. They also note that a similar policy is used when it comes to power line taxes, liquor licenses and fines.
Right now, the revenue to local school districts from the wind tax seems minimal, with Triton getting $791, Southland receiving $3,128 and Grand Meadow collecting $3,726. But those numbers are expected to swell as more wind farms sprout up across the area. Helping fuel the development is a state mandate that requires electricity producers to get a quarter of their power from green sources by 2025.
Statewide, total revenue generated by the wind tax has grown from $1.2 million to $1.8 million. In Mower County, nearly 60 wind turbines are operating, with construction under way on a third wind farm. Four other potential wind farms are in the works. Neighboring Dodge County has 40 wind turbines spinning, and three other potential wind projects are being discussed.
Take those numbers into account, and Grand Meadow Public Schools could miss out on more than $1 million in potential tax revenue, Brown said.
Meanwhile, Triton Public Schools Superintendent Robert Kelly said he did not even know about the tax — even though the bulk of the county’s wind turbines fall within the district’s boundaries.
"I’ve got to admit, this totally caught me by surprise that the county has not notified us of anything we’re getting down the road," Kelly said.
He added that the district has been struggling financially in recent years to cover the costs of offering all-day, everyday kindergarten. The district spends $100,000 per year to subsidize the program and had been hoping the Minnesota Legislature would pass a funding bill that covered the program’s costs. Instead, the district will get a slight increase in funding — but not enough to cover the gap. Kelly said money from the wind farms would have helped ease the district’s budget woes.
In fact, the three districts that benefited from the wind tax this year — Triton, Southland and Grand Meadow — are asking voters in November to approve operating levy increases. Further adding to the problem is that even though wind turbines are not subject to property taxes, they do raise property values. When property values increase, the district’s net tax capacity rises. Kelly said that means the district gets fewer dollars from the state.
He added that the wind tax revenue "Would have been definitely a plus for us to help with our budgets, but the politicians seemed to think that was unfair to somebody."
Republican Rep. Randy Demmer of Hayfield added that he had no idea this provision was put in the education bill when he voted. He has scheduled a meeting with education officials to discuss the policy and see if "there might be some rationales I’m not aware of."