Tuesday, September 25, 2018

OCPA column: Continued wind cronyism devastating school budgets


Continued wind cronyism devastating school budgets
by Jonathan Small, president of the Oklahoma Council of Public Affairs

How did mankind figure out fire without a government program? These days every new technology has backers who insist they are one more government check away from being the next big thing. That was the Solyndra story, and in Oklahoma, it is the story of wind farm companies.

Crony handouts are unfair—the biggest, best-connected companies benefit, often at the expense of the little guy or the disruptive outsider. They are also addictive. Even after the Oklahoma Legislature repealed the most lavish subsidies and tax breaks in 2017, wind energy companies are still trying to avoid paying ordinary taxes.

The journalism website NonDoc.com reported recently on a lawsuit involving two Oklahoma counties and a wind farm operator ultimately owned by the French government. The Rock Falls Wind Farm in Grant and Kay Counties is owned by a subsidiary of EDF Energy, a British firm, which itself is a subsidiary of √Člectricit√© de France. EDF convinced the Blackwell Economic Development Authority (BEDA) to pony up $220 million underwritten by “lease revenue bonds,” which are to be retired by a complicated agreement that supposedly leaves ownership in BEDA’s hands. Those dollars built the wind farm, which went online last year.

BEDA then applied to Grant and Kay counties for a property tax exemption as the ultimate owner of the wind farm. The counties said “no,” and BEDA sued.

Meanwhile, tiny Deer Creek-Lamont Schools issued $2.5 million in bonds that were to be paid off by property tax revenues—including those from the wind farm. No one warned the school that the expected cash flow from the wind farm could be curtailed. Now those funds are imperiled by BEDA’s lawsuit. Newkirk Public Schools also stands to lose property tax revenue.

A public agency underwrites a wind farm owned by the French government then tries to bully two counties into giving them a tax-free ride. If they win, two school districts will suffer, and taxpayers in two counties will be forced to make up for the lost property tax revenue. This would set a dangerous precedent that if proliferated will bankrupt taxpayers and schools.

Is it any wonder that the wind farm industry floods the state Capitol every year with 40-plus lobbyists demanding handouts at taxpayer expense? Now they’re trying to win backdoor subsidies at the expense of schools.

Over the last four years led by the executive branch, state government has raised the annual tax and revenue burden on Oklahomans by more than $1 billion. Before the average Oklahoman is asked to contribute an even higher burden by any politician, it’s time for lawmakers to end all the various wind cronyism schemes.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.

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