Wind turbines create windfall for counties, townships

Apr 2 - McClatchy-Tribune Regional News - Julie Buntjer The Daily Globe, Worthington, Minn.

The wind turbines scattered across southwest Minnesota have made a tremendous economic impact on the region, from construction crews settling in our communities to payments made to landowners for easements. Perhaps the greatest economic impact, however, is now being seen in counties where turbines harness the wind and convert it into kilowatt hours.

Each year, as Minnesotans busily prepare their income tax returns, the wind energy companies who have erected towers here are reporting to state officials the total number of kilowatt hours the turbines have generated during the previous year.

For each kilowatt hour produced, the county where the turbine stands gets 12 cents. That may not sound like much, but it adds up -- to $827,190 for Nobles County alone in 2012. The wind energy tax revenue for the county grew by nearly five-fold just since the year prior, when revenues came in at $171,620. The added tax revenue is a direct result of significant expansion in wind farms in the county. To date, there are 163 turbines operating here.

Still, Nobles County is far from leading the way in the region. Our neighbor to the north, Murray County, gets that honor, with $1,389,901 in wind energy tax payments coming in this spring. Jackson County, to the east, comes in second with $1,153,006 in wind energy tax collected.

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Pipestone County, even though it is home to more wind farms than other counties in southwest Minnesota, will collect $577,091 this year. Many of their turbines, some of the first to appear in the region, were installed before new technology and larger megawatt towers were developed.

Cottonwood and Rock counties trail with significantly less wind energy tax revenue, although a major wind project is planned in Rock County this year -- a project that will impact their revenue stream in a couple of years.

In each of the counties, the wind energy tax revenue is divided with 80 percent going to the county coffers, and the remaining 20 percent to the townships where the turbines are located.

In Nobles County, Larkin, Worthington, Ransom, Wilmont, Summit Lake, Olney and Dewald townships will share in more than $34,000 this year -- money they can use to improve township roads and lower taxes for residents.

The counties spend the money the same way.

Nobles County Board chair David Benson said while the wind energy production tax revenue goes into the general fund, he'd like to see commissioners direct the money to road improvements. For several years, the county set a portion of its annual levy specifically to build up a road account.

"This is our first big payment and it will grow," Benson said. "My goal is to emphasize road work."

Still, he's quick to say the money won't go far. The county's 2012 share will be $661,752 -- enough to do just a couple miles worth of road construction, he said.

Benson hopes to plan a work session within the next month so commissioners can decide what they should do with the income. Nobles County Auditor-Treasurer Sharon Balster said the payments won't all be in until mid-May.

In other counties, much of the wind energy tax revenue will be used to offset property taxes.

"Indirectly, it benefits the county in many different ways," said Pipestone County Administrator Sharon Hansen. "It's an indirect benefit to all of our departments. We think it benefits property taxes at the end of the day, and that's what we use it for."

In Murray County, wind energy tax revenue initially was used for capital improvement projects in the years levy limits weren't in place. The Murray County Fairgrounds was a major benefactor, with a new grandstand and concession stand built there in recent years.

"Some of these projects, probably without that tax, we weren't able to do," said Murray County Auditor Heidi Winter.

This year, Murray County Commissioners decided to use the funds to offset property taxes.

"It hasn't been earmarked for specific purposes," Winter said of the money. "Some of the townships get a hefty amount. We encourage them to continue to levy because, for one, they get a township road allotment from the state and they have to levy a certain value to get this ... allotment."

Townships also have to cover the road maintenance costs, and the trucks that travel the roads to the towers do cause damage.

Jackson County Coordinator Jan Fransen said her county will get approximately $922,000, with the townships where turbines are located sharing in $230,000.

"Annually, we designate the first $350,000 to tax relief," Fransen said. "This year, the board, by resolution, increased that to $450,000 because of the market value exclusion."

As for the rest of the money, she said Jackson County Commissioners are talking about putting it in a capital improvement fund, perhaps for the construction of a new highway maintenance facility.

"There's no official action yet," Fransen cautioned. The current maintenance building was used as a hemp plant during World War II.

"It's pretty old," she said. "It's something we've been looking at for many years. We're looking at a joint facility with the city of Jackson."

The idea being discussed is to issue bonds for construction of a new facility, and then use the wind energy tax revenue to repay the bonds.

Of course, each of the counties making plans for how they might spend the tax revenue still hinges on the Minnesota legislature. If the state decides to impose levy limits on counties again this year, many would have no choice but to use the funds for general operating costs.

In Nobles County, Benson has been a staunch supporter of trying to get the wind energy production tax into freestanding legislation that would ensure the tax payments would continue regardless of other legislation.

If levy limits are placed on counties, they still get the wind energy tax, but they have to reduce their levy by whatever they get in wind energy tax revenue.

Benson has been pushing to get the legislation heard by the state house tax committee, but chairman Greg Davids, R-Preston, has so far refused to hear their request. The Senate tax committee heard the requests last week.

Hansen said she, too, is concerned about levy limits.

"(The wind energy tax) is very important to us because of how it assists our property taxes," she said. "We've been working with the SRDC (Southwest Regional Development Commission) to ensure there isn't a loss of revenue in any way, shape or form."

Daily Globe Reporter Julie Buntjer may be reached at 376-7330.

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