Oklahoma District 1 Senator Micheal Bergstrom proposes cap on wind credits to help fund implemental raises for teachers.
OKLAHOMA CITY – Seeking funding for teacher pay raises as promised in his campaign, Ok. District 1 Senator Micheal Bergstrom, is proposing a cap on wind credits. Wind credits are a part of the Tax Credit for zero emission facilities.
State Sen. Bergstrom has filed a bill that would cap tax credits at $25 million statewide for electricity generated by zero emission facilities, including wind energy, and another that could use the savings to provide a graduated teacher pay raise over the next three years.
“Teachers need a pay raise in Oklahoma,” Bergstrom said in a press release. “At the same time we have another massive revenue shortfall. Which, needless to say, will make funding a pay increase difficult. So I suggest we cap the payouts on our wind tax credits and use some of the money we save to begin funding that pay raise. To that end, I have submitted two bills for consideration by the legislature, Senate Bills 95 and 97. One that puts such a cap in place, and a second which lays out a plan to give every public school teacher a $5,000 raise.”
The Oklahoma Evaluation Commission has also recommended capping the credits and suggested closing the program early by January of 2018.
Under the provisions of Senate Bill 95, the proposed $25 million tax credit cap for zero emission facilities would be effective for tax years beginning on or after January 1, 2017. The Tax Commission would allocate the credit under the cap, where it could be reduced, depending if more credits are claimed than the $25 million cap. Currently, there is no cap for tax credits for zero emission facilities. In 2014, $113 million was claimed in wind tax credit, which included carryover, but only $59.7 million was paid out to taxpayers. Under SB 95, that credit would be limited to $25 million.
According to Bergstrom, the wind tax credit claims could equal $270 million next year with an approximate $40 million in payouts if continued.
“We can’t afford it, plain and simple as that,” he said in an interview. “The goal that the state set was for 15 percent of our energy, our electricity to be produced through wind, we’re at over 20 percent right now.”
Bergstrom said 60 percent of the wind energy produced in the state is sold to out of state consumers. The Senator also explained that 93 percent of companies owning wind farms in Oklahoma are out of state farms or farms owned by companies outside of the U.S. However, landowners where the wind farms are located do benefit and there are some ad valorem tax benefits to communities, which will continue.
“I think there’s an understanding with even the wind industry that the wind credits are going away,” he said.
Other proposals from the wind industry, including transmission lines to other states that may export up to 80 to 90 percent of wind-generated energy out of Oklahoma, are causes for concern in allowing the credits to continue, according to Bergstrom.
“We have good reasons to not only cap the wind credits program payouts but to close this program. The Incentive Evaluation Commission has recommended doing just that,” Bergstrom said. “Our program for encouraging the generation of electricity through wind has been successful, and that is a good thing. However, especially considering the difficult situation we find the state in, with a $868 million revenue shortfall, we can no longer afford these overly generous tax credits.”
The Senator said he is not opposed to wind energy and he has received some pushback and is willing to look at other possible energy source tax credits if warranted.
Bergstrom has also filed Senate Bill 97, which would give Oklahoma teachers an incremental pay raise over the next three years. The legislation would align Oklahoma public school teacher pay more closely with average national pay schedules, which are outlined in the bill. For example, an Oklahoma public school teacher with a bachelor’s degree and five years’ experience would earn $34,500 for the 2017-18 school year, $36,500 the next year, and $38,500 in the third year.
The anticipated savings from Bergstrom's proposed wind credit cap would be used to fund the bump in teacher pay. The provisions of the teacher pay bill are contingent on the adoption of the wind credit legislation.
The Senator from Adair has spent the last 20 years before his election in public education. The last 17 years of those with Bluejacket Public Schools. Bergstrom is a proponent of teacher pay raises but said he felt other revenue sources were more appropriate ways to fund these raises than the defeated sales tax.
Bergstrom says the legislation he’s authored won’t completely shore up the gap in teacher salaries, but it’s a start.
“Unfortunately, the limit on wind credit payouts is not enough to fund a $5,000 teacher salary increase in a single year,” said Bergstrom. “Keeping that in mind, I have structured Senate Bill 97 so that teachers will receive a $1,000 raise the first year, and $2,000 in each of the next two years. By passing these bills, even in a difficult budget year, we are demonstrating to the public and to our teachers that Oklahoma is serious about education and taking care of those who teach our children.”
Contact Sen. Micheal Bergstrom at 405-521-5561 or firstname.lastname@example.org for more information.
Melinda Stotts is the associate editor of the Miami News-Record. She can be emailed at email@example.com. or followed on Twitter @MelindaStotts1