Wind power hits headwinds; personal property tax break advances

May 4, 2015, 6:08 a.m. ·

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A proposal to subsidize wind and solar power ran into headwinds in the Nebraska Legislature Monday, while senators moved toward tax breaks for businesses and agriculture.


Originally, Sen. Jeremy Nordquist of Omaha was proposing a subsidy of one and a half cents per kilowatt hour of electricity generated by alternative means, like wind or solar power. Now, he’s talking about a subsidy half that size, in a program that would be capped at $75 million. Nordquist said the goals of the proposal were "to contribute to a diverse state economy; increase state and county revenues through taxes paid by the producer of electricity, increase investment in the state through designation of electric generating facilities as CBED development projects and then to create jobs in the state of Nebraska."

CBED stands for community based economic development projects, which require 25 percent of their investment to be made in Nebraska, for everything from wind turbine towers to payments for leasing land from farmers.

But North Platte Sen. Mike Groene was having none of it. "If you want to be so-called progressive and you’re worried about the small man, these projects drive up the cost of utilities to the average homeowner. This is about ‘green’. This is about -- call it a secular humanism religion who believes that we’ve gotta save the planet. This has nothing to do with practical free market principles and on the cost of electricity," he said.

And Sen. Curt Friesen of Henderson worried that the bill could actually drive up the price of electricity. "If we overdevelop our wind energy, you’ll have a coal-fired power plant idling along around 40 percent of capacity and when the wind dies down they need like a 24 hour notice in order to ramp up production. And so what needs to be done when all this wind goes offline because the wind quits is we need to build natural gas peaking systems. And who’s responsible for that cost? The customers of public power," he said.

Senators moved on to another subject before reaching a second-round vote on the bill.

Monday afternoon, senators took up debate on a proposal to provide some relief from personal property taxes, like those paid by businesses on equipment like computers, or by farmers on tractors and combines. The proposal by Grand Island Sen. Mike Gloor, chairman of the revenue committee, would exempt $10,000 worth of value of personal property from taxation. Gloor said at the average statewide tax rate, that would save businesses and farms about $169 each. It would cost about $15 million to $20 million.

Sen. Dan Hughes of Venango, a wheat farmer, estimated it would save him $103. "It is property tax relief. But it’s pretty doggone slim. We may be able to pat ourselves on the back and say ‘Yup, we gave everybody property tax relief.’ And it does add up to a lot of money. But this body had better remember this is a pittance. This is not much money in the pockets of the industry that drives this state," he said.

Gloor said that while senators might prefer to focus the relief on small farmers and businesses, under the constitution it would have to go to all who those who pay personal property taxes, including big retailers and railroads. And he conceded that the proposal was not a "home run," for balancing the so called three-legged stool of property, sales and income taxes. "It’s taken us a long time to get to the point where things are out of whack and that the stool has different legs that are a little longer than others. It’s going to take bunts and singles," he said.

Gloor also pointed out that the budget being advanced by the Legislature contains a $120 million increase in a property tax credit fund over the next two years. Senators gave the bill first round approval on a vote of 29-0.