Wind farms bring rural schools new tax money, but state laws often steer it to facilities rather than cutting class sizes

Wind turbines loom over Okarche Elementary in Oklahoma. (Photo by Bryan Terry, The Oklahoman)

Property-tax revenue from wind farms has benefitted many rural schools, but "because of the complexity of how schools are financed, the impact on student achievement is limited, according to a new study that we conducted as researchers in public finance, education economics and energy policy," Eric Brunner, Ben Hoen, and Joshua Hyman write for The Conversation. Brunner is a University of Connecticut economics and policy professor, Hoen is a Lawrence Berkeley National Laboratory research scientist, and Hyman is an Amherst College assistant economics professor.

Wind power is increasing. In 2020, more than 1,600 farms with nearly 68,000 turbines generated over 100 gigawatts of electricity—about 7 percent of U.S. energy needs. "The industry is continuing to grow rapidly, with another 200 gigawatts of projects applying for grid connections as of the end of 2020," Brunner, Hoen and Hyman report. "With all this rural development come property tax revenues. Wind projects paid an estimated $1.6 billion in property tax revenues to states and local jurisdictions in 2019."

The money is welcome in cash-strapped rural school districts, but Brunner, Hoen and Hyman wanted to find out how much it was really benefitting schools. Their research found a mixed bag: "Wind energy installations led to large increases in local revenues to school districts," they write. "Schools dramatically increased spending on capital outlays, such as buildings and equipment, but made only modest increases to their operating budgets, like hiring more teachers to reduce class size."

The authors note that smaller class sizes improves student achievement, and wanted to know why many districts spent new revenue on building or repairing facilities instead of hiring more teachers to reduce class size. They discovered that local and state tax laws often give schools a strong financial incentive to put new revenue into construction and renovation instead of teachers and operations. Read more here.