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WASHINGTON, D.C. - As Congress begins its battle with President Barack Obama over the looming fiscal cliff, it could mean some changes for industries in Kansas. One of the possible changes: Tax credits for wind energy production.
Those credits are set to expire at the end of this year and the tax breaks are dividing Kansas lawmakers. Wind farm dedications like one held in Ellsworth County Wednesday may soon be a less common sight in Kansas and other states. If Congress does not extend tax credits for producers of wind energy, industry lobbyists and some lawmakers argue it could mean a dramatic decrease in the development of new wind farms.Kansas Governor Sam Brownback joined Governors Terry Branstad, R-Iowa; John Hickenlooper, D-Colo.; and John Kitzhaber, D-Oregon this week in urging Congress to extend the credits during its lame duck session.
Governor Brownback is at odds with some other Kansas lawmakers on the issue. "I don't think the taxpayers have any business subsidizing an industry for more than 20 years," said Rep. Mike Pompeo, R-Wichita. "The production tax credit has been around since 1992."
The Fourth District Congressman said it is time to end subsidies for all energy industries. "I have legislation that gets rid of tax credits for the oil and gas industry," he said. "It gets rid of tax credits in the entire internal revenue code for algae, for biomass, for biofuels."
In south-central Kansas, Harper County Economic Development Director Mike Lanie said the development of wind energy has benefitted his county. Those benefits include new jobs and money paid by wind developers straight to the county's coffers in lieu of taxes. That money accounts for about 10 percent of Harper County's approximately $10 million budget, Lanie said.
Still, he believes the biggest boost has been to the county's economy. "We have people that are renting homes and apartments," he said. "The hotels are full, so it's good for the economy."
Of course, much of the new economic activity in Harper County is the direct result of an oil boom in northern Oklahoma and southern Kansas. However, Lanie said wind energy allows the county to carry a more diverse industry portfolio. "Being blessed with the oil activity and the wind activity at the same time; couldn't have a better scenario," he said.
It is a scenario that, according to Lanie, has also benefitted the county's farmers, so he is hoping for an extension of the tax credits. "These farmers have struggled for years and now they have this revenue coming in, whether it's oil or the wind farm," he said. "We're very, very happy for this county."