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CASPER, Wyo. - Nov 30, 2006
A state lawmaker is questioning proposed tax breaks to encourage the construction of coal gasification power plants in Wyoming. "When is it an incentive and when is it a subsidy?" she asked. The proposed tax breaks are being considered by the Joint Minerals, Business and Economic Development Interim Committee, which met Monday. The tax breaks would apply to power plants that convert coal into gas, then burn the gas much more cleanly than coal can be burned. Steve Waddington, executive director of the Wyoming Infrastructure Authority, said eliminating the 5.5 percent state severance tax on coal for a 500-megawatt "integrated gasification combined cycle" plant would amount to an annual $2.2 million tax break. "This would be a significant incentive for those considering an IGCC plant to build it in Wyoming," he told the committee. He said the cost of coal was not a "driving factor" in considering where to build coal gasification plants. But he said a tax holiday might give Wyoming an edge amid competition for such a plant. He also said that Wyoming's thin air and high-moisture coal could affect profitability for whoever builds a coal gasification plant in Wyoming. But Hammons pointed out that other states seeking coal gasification plants have taxes that Wyoming doesn't have, including a personal income tax. "What if we create a false sense of commercialization?" she asked. Dan Neal, executive director of the Equality State Policy Center, also argued against a severance tax holiday. He said the whole point of encouraging coal gasification plants would be to boost the state's revenue from coal. "If we don't collect the taxes, then we squander our assets," he said. The Wyoming Infrastructure Authority recently sought partners for a coal gasification demonstration project. It expects to decide soon from a pool of about a dozen applicants. ___ Information from: Star-Tribune, http://www.casperstartribune.net |
Lawmaker questions tax breaks for power development