Keating, Coburn urge Senate to pass SB888 and end wind subsidies

Gov. Frank Keating and Dr. Tom Coburn Urge State Senate to Take Up Senate Bill 888 and End Exploding Wind Subsidies

Yesterday, the Oklahoma House of Representatives passed Senate Bill 888 which eliminates the ability for producers of wind energy to cash in unused subsidies. Gov. Frank Keating and Dr. Tom Coburn issued the following statements:

From Gov. Frank Keating:

“It’s time to end cash subsidies for wind production in Oklahoma. The wind production subsidy program has grown wildly beyond what was presented to me and lawmakers when we first approved the credits. As policymakers, when we realize that an act of government isn’t working or has gone way beyond what was intended, it is our duty to change it.” said former Gov. Frank Keating, who signed the first iteration of wind production tax credits when he served as the 25th Governor of Oklahoma.
“Protecting millions of Oklahomans from being forced to unjustly subsidize a wasteful and now unnecessary government program is far superior and morally right rather than adhering to a flawed scheme. The drafting of SB 888 treats refundable wind subsidies in a prospective manner, just as lawmakers have done with the constitutional elimination of the refundability of the Oklahoma Earned Income Tax Credit.”

From Dr. Tom Coburn:

“Since 2015, policymakers at the state Capitol have raised taxes and annual revenue on Oklahomans by $1.1 billion—even raising Oklahomans’ personal income taxes since 2016 by at least $185 million annually alone. Given how much in taxes have been raised on millions of Oklahomans who don’t have an army of well-paid lobbyists to represent them at the state Capitol, it’s unconscionable that Oklahoma would continue the kind of crony-capitalist policy that is a major part of state government’s over-spending addiction that got us into this problem in the first place,” said Dr. Tom Coburn, who served as a United States Senator for Oklahoma.

“I encourage Oklahoma State Senators to cut through the hyperbole and scare tactics presented by crony capitalists who want to continue to massively benefit at the expense of millions of Oklahoma taxpayers. A vote in favor of SB 888 is the exact kind of reform and oversight that lawmakers can support to keep their promise to voters to protect them from wasteful government spending. Wind production in Oklahoma is receiving more than $110 million a year in subsidies from state taxpayers. With some estimates showing state subsidies for one wind turbine exceed the starting salary of an Oklahoma teacher even after the legislatively enacted pay raise, this boondoggle must end.”

GOP Leadership go back on word, pushing Wind GPT instead of removing credits

One thing from the last year that seems evident is that if the Republican leadership in the Legislature gives their word on an issue, don't believe it. Here's an article from the Journal Record; additional comments and emphasis is mine.

WIND DEBATE ANYTHING BUT CALM

By: Catherine Sweeney The Journal Record

OKLAHOMA CITY – Despite a guarantee that the state House of Representatives would hear a bill to change tax credits for wind power, the measure never appeared on the floor Thursday, and lawmakers said they are switching gears.

Top-ranking House Republicans held a press conference on Wednesday to address concerns and potential misinformation about the fiscal 2019 budget. Those officials have taken to several platforms to address multifaceted rumors that the increases in education costs aren’t fully funded. At the end, House Floor Leader Jon Echols said that the House would hear Senate Bill 888 first thing the next morning.

That measure has included several provisions, which were entirely replaced by other policies in amendments. The final of the handful of forms would end the zero-emission tax credit’s refundability for wind companies. It would prohibit the companies from using more credits than they need to cover their liability. The bill’s supporters said the state shouldn’t cut checks to corporations, especially in tough budget times. Over the past few years, Oklahoma has spent about $70 million [annually] on these refunds, which could be used elsewhere for the few years that the credit has left.

SB 888 has struggled to make it this far in the committee process, often garnering close votes and opposition from the majority party. [and opposition from the Democrats]

The House convened at 10 a.m. but immediately went into recess so that House Republicans could meet to caucus, where members sort by party and chamber to strategize privately. Floor proceedings resumed, and members heard several bills unrelated to wind before recessing to go into caucus again. Finally, about 1 p.m., Echols announced that tension and a lack of political will to pass that provision had taken hold.

“That’s why we were gone so much and did not run 888 today,” he said. “We will be hearing an agreement on a (gross production tax) on Monday.”

That tension was visible long before Thursday. In an April 10 House committee meeting, SB 888 got nearly as many votes in opposition as it did in support. Of the 12 members who voted against it, half were Republicans. That included House Assistant Majority Whip John Pfieffer, who represents District 38, which contains several wind farms. He said that measure would hurt companies that have already located in his district. Wind farms blanket western Oklahoma, which is widely represented by Republicans.

The idea of a gross production tax on wind is also not necessarily a new development. The idea of implementing one has been floating around the Capitol for months, most notably in January when the Step Up Oklahoma coalition included it in its recommended tax package. Once the dust settled with the two-week teacher walkout, budget planners started eyeing it again. Senate Floor Leader Greg Treat has said several times that the delay was to prevent giving education demonstrators false hope; revenue from those provisions wouldn’t enter state coffers for years.

In an April 12 interview, House Majority Leader Mike Sanders said that although the Senate has seemed to focus on caps and ending refundability this year, all options are still on the table. Personally, he said, he would prefer implementing a wind gross production tax. He said the revenue stream would be more sustainable, and that public perception would likely improve if members prioritized policy over politics. He raised a concern that the Senate seems to be more focused on measures such as SB 888.

Democrats have almost uniformly opposed undoing the wind credits, while Republican legislative leadership evidently prefers to vote on a new tax (difficult-to-attain 3/4ths vote measure) rather than removing tax credits (easier-to-reach 50%+1 vote measure).

Wind GPT would bring in about $20M annually. SB888  as proposed by Brecheen, Dahm and Coody would save $70M annually - $500M-$750M over the next ten years.

Legislative leadership seems to want to raise taxes on wind with one hand, while giving them a greater sum through tax credits with the other hand.

Brecheen, Dahm demand end to corporate welfare for wind industry

Sen. Josh Brecheen explains his bill to end corporate welfare for the wind industry while showing the countries that benefit from the tax credits.

Senators demand legislature end corporate welfare for wind industry

Bills filed to stop wind energy tax credits and give millions to schools and vital state services

Oklahoma State Senators Josh Brecheen and Nathan Dahm filed legislation Monday that would end check-in-the-mail tax credit payouts paid to wind energy companies who are exempt from paying income taxes. Oklahoma will pay $500-$750 million in tax credits to wind energy companies over the next 10 years. Approximately 93 percent of the payments will go to foreign and out-of-state shareholders.

Senate Bill 888 and SB 6xx would halt the annual $70 million payout, freeing up additional money for education, health care and other core government services. Both bills would only require a 51 percent vote to pass as compared to other ideas to place a tax on the industry, which require an almost unattainable 75 percent vote to pass.

“This $70 million annual corporate welfare payment must end,” said Brecheen, R-Coalgate. “It’s time for the voice of the taxpayer to overshadow the voices of the 50 foreign and out-of-state paid lobbyists. Big Wind executives in Italy and Spain aren't concerned about our taxpayers subsidizing them nor are they concerned about our students, teachers, hospitals, nursing homes, law enforcement agencies and other important state services.”

Sen. Dahm said it was not right to continue paying wind energy tax credits when the Legislature was raising taxes on other Oklahoma taxpayers.

“Oklahoma taxpayers have been asked to shoulder a larger tax burden to pay our teachers and fund our schools – but the wind industry is fighting to keep its sweetheart deals and taxpayer handouts in addition to receiving a federal tax credit, property tax exemptions, and more.” said Dahm. “We should not be taking money out of the wallets of every Oklahoman by raising their taxes while continuing to cut a check for $70 million to the wind industry every year.”

Sen. Nathan Dahm explains importance of ending corporate welfare before raising taxes on working Oklahomans.

Column: Cut Wind Waste to fund Education

Here's an article I received that discusses an option to help fund education spending:

While some are asking where money can be found to fund core government needs in Oklahoma...ONE SIMPLE ANSWER is ending corporate welfare to the Corporate Wind Industry!!!!   If we don't do something truly meaningful this session ...another 70 million dollars is going to LITERALLY....be...Gone with the Wind ....and that 70 million could have gone instead to meet true Oklahoma classroom needs, etc.

We must not allow our legislators to say they "we will think about that tomorrow" ...next session or next week... concerning the corporate welfare payments made to wind...at a rate of 70 million per year AND ADDING UP TO $500-$750 MILLION in total payout TO WIND COMPANIES OVER THE NEXT TEN YEARS (ACCORDING TO TAX COMMISSION). We cannot delay in addressing this especially when more tax increases on working families continue to be discussed.  The time to stop corporate welfare payments to BIG wind is now...before working families are asked to pay more.

There is a limited opportunity while teachers are at the capitol to overtake the influence of the approximately 50 industrial wind lobbyists who are being paid to convince legislators to continue  the annual payment of 70 million dollars per year after the state has already ZEROED OUT their ENTIRE income tax liability. The wind industry does not pay a dime in income taxes. Additionally, after they don't pay a dime in income taxes... then the taxpayer's money (taken from you and me)... is used to cut them a 70 million dollar check in the mail...and that 70 million is likely to be 75 million, next year.

Oklahoma currently ranks #2 in wind power generation and that is because Oklahoma has the wind... not because of the tax credit.  Don't buy the paid for sales pitch that the industry won't continue to locate here... if not subsidized.  Oklahoma after all is where the wind comes sweeping down the plains!!!

THE SHENANIGANS OF THIS CORPORATE WELFARE PAYMENT WAS EXPOSED ON THE SENATE FLOOR LAST FRIDAY... the entire SENATE debate from Friday can be found here.

Once that link/site comes up (you will see a video on screen... so tap the triangle shaped play button)....then scroll the full 2 hour video length to the 1 hour and 17 minute mark ...to see the start of wind reform Amendment  proposed...YOU WILL SEE SOMETHING UNIQUE IN THAT DEBATE AS THE CORRUPTION OF PROTECTING SPECIAL INTEREST AT TAXPAYER EXPENSE IS EXPOSED... and "The Man Behind the Curtain" IS EXPOSED!!!    At 1 hour and 41 minutes the audio freezes...but if you will scroll to 1 hour and 56 minutes...it continues and goes until 2 hours and 5 minutes. If you scroll to exactly the 3 hour mark...you will find closing debate by Senator author of amendment.

ACTION PLAN...WHAT NOW....

This coming Monday... SB888 by Brecheen will be heard in the House...in committee...at 4 pm in the House Appropriations and Budget committee.  It’s a similar attempt as to what was tried on the Senate floor Friday...(see video link).....true attempt at  meaningful wind reform (not a soft cap of the 70 million annual corporate welfare payment...but full elimination of payout).  The amendment to eliminate the wind corporate welfare payment will be added to SB888 by Rep. Coody.  The amendment is germane to the current bill and would eliminate the 70 million dollar annual refundable tax credit given to wind industry....after the industry is allowed, by our state legislators, to not pay a dime in income taxes.  Oklahomans must contact the committee members who will vote Monday...and encourage them to "vote for the amendment to be added to the bill eliminating the corporate welfare wind payment." Click here for that committee membership...so you can contact certain legislators on that committee...before the vote at 4 pm this Monday, April 9th.

ALSO ...DON'T BE FOOLED by legislators.  ..Educate yourself on tax credit wind terminology by reading the below!!!

THE OKLAHOMAN NEWSPAPER HAS REPORTED THIS WEEKEND...THAT HOUSE LEADERSHIP may put wind reform up for a vote this coming week… after pressure has been building...HOWEVER..... WATCH FOR THE WORDS "SOFT CAP" AND "CARRY FORWARD."

The taxpayers need to be wary of the tricks, as the discussions continue. What types of wind reform are allowed by leadership and “those behind the curtain” (see Wizard of Oz video clip…) to come to the House or Senate floor matters.   What looks like real wind reform is most likely to be a slight of hand trick disguised as protection for the taxpayer UNLESS the taxpayer and teachers are up to SPEED.....wind speed.

#1...After 16 years of corporate welfare payments to big wind there is no excuse to not end the refundable tax credit in totality ...the 70 million dollar check in the mailbox should be stopped...all 70 million.  That is the right solution and the fairest to the taxpayer after 16 years of PAYOUT. Ending the refundability characteristic is what WILL accomplish this. The word “refund" is a bit misleading.  It's called refundability but it's not refunding something the WIND COMPANIES payed out....it’s refunding the value of the credit they earned for every kilo-watt hour of electricity produced. They didn't pay a dollar in income taxes. They still get their income tax liability ZEROED out by ending refundability...but that is it...no more checks in the mail, while taxpayers are having their taxes raised in this climate.

#2... Some want to discuss caps but be LEERY of discussions on capping the 70 million per year payout.  Capping the payout can be done in multiple ways and the easy way for the magicians to confuse the public is to place what is called a "soft cap" with "carry forward" on the 70 million dollar payout.   If you hear the word "soft cap" or "carry forward" then the taxpayers are getting duped once again.  A soft cap means they cap the payout.... to say 35 million.... HOWEVER... the 35 million they don't pay out ...totaling the 70 million they would otherwise pay out  (absent the 35 million dollar soft cap) is going to be allowed to be carried forward and payed out fully ... just in later years.  THE TAXPAYER STILL HAS TO PAY THE FULL AMOUNT WITH A SOFT CAP.  A soft cap just means big wind still gets the full corporate welfare payment ...they just have to wait longer to receive it. Oklahomans must demand the discussion on "soft caps" or "carry forward" provisions in this deal be exposed/banned from being accepted as the true solution.   If your legislators are going to do meaningful reform...say no to "soft caps" and "carry forward" payments in years in the future.

#3 The one type of cap to the payout you can count on to be transparent and easily understood  is called a hard cap... a hard cap means that they are truly limited to the announced dollar figure of the cap...no tricks...no carry forward payments in future years.  If 10 million is the hard cap...then all wind industries turning in their tax credits to the state totaling 70 million...would only get a proportionate share of their credit. It would be worth just a percentage of its original claimed value. For example, a 10 million dollar cap would save the Tax payers a minimum of 60 million annually.  Those wind companies sharing the 10 million dollar check in the mail would only get a proportionate share of the 10 million...and that's it.