Thursday, December 07, 2017

Rural schools may have been hurt by state tax incentives for wind farms in Kansas

The wind industry is booming in Kansas, but tax incentives that state officials used to lure foreign wind-farm investors may have hurt rural schools. The incentives sparked a decade-long wind boom in the state, which is one of only five that gets more than 20 percent of its power from wind (the others are Iowa, Oklahoma, and the Dakotas).

But because of those exemptions, almost $630 million of wind-farm equipment will never be taxed. If it were, it would generate around $82 million a year for the 24 rural counties with wind farms. "Of that amount, more than $32 million a year would go to rural school districts in those counties, according to revenue-department estimates. And that doesn’t include five wind farms that have yet to be evaluated," Mike McGraw and Ryan Hennessy report for Flatland, the digital magazine of Kansas City PBS. The report was done in collaboration with the Midwest Center for Investigative Reporting, an independent nonprofit news outlet based in Illinois.
Flatland graphic; click on the image to enlarge it.
Kansas' largest wind farm, the $1 billion Flat Ridge project, spans 70,000 acres near the Oklahoma border. It's owned partly by British Petroleum, and it doesn't pay any property taxes on its generators that could fund local schools and services. The lost revenue is partly made up by state subsidies.

"That lost revenue has far-reaching consequences for a state with more than its share of financially struggling rural school districts and a shortfall of hundreds of millions of dollars in constitutionally required school funding, at least according to a Kansas Supreme Court ruling in October," McGraw and Hennessy report. Rural school districts are having a harder time hiring and keeping good teachers, partly because they pay teachers the lowest salaries in the country.

Kansas wind farms have agreed to make small "payments in lieu of taxes" in those counties, but it's only a fraction of what the taxes would be, Flatland reports. Wind industry officials say the lost taxes are worth it because of the thousands of jobs created and the more than $16 million a year paid to Kansas land owners each year for land leases. 

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