In the empty rheotoric of Gov. Ted Strickland’s State of the State address, he listed a number of proposals- One of them was a series of tax credits to do what liberals love to do- manipulate the market for political interests through the tax code:
This 40 million dollar commitment will offer access to capital for new and expanding advanced energy companies. And we will at least double the impact of our efforts by requiring those seeking state funds to, at a minimum, match our investment dollar for dollar with new private funds. Revenue generated from the fund’s investments will keep powering Ohio’s economy because it will be reinvested in additional energy companies.
With the federal tax credit currently in place for renewable energy, companies will be making commitments to new facilities in the coming months. But the fact of the matter is that Ohio’s tax structure discourages wind and solar companies from coming to Ohio to generate renewable energy.
We should give those companies every reason to choose Ohio. That’s why I am asking the legislature to erase Ohio’s tangible personal property tax on generation for wind and solar facilities that break ground this year, create Ohio jobs, and begin producing energy by 2012.
Because such forms of energy are wildly inefficient and expensive, government apparently can do what the market and profit seeking entrepreneurs cannot do just through hands outs corporate welfare. But thankfully, this is the sort of idea that Republicans oppose, and the Ohio Senate Republican majority will make it impossible to pass such a law, right?
In fact, Republicans- with rare exception- are bending over backwards to pass Ted Strickland’s proposal. Senate Bill 232 was just passed out of committee and will soon be voted on the House floor.
Here is the summary of the bill:
Sens. Widener, Goodman, Jones, Wagoner
· Provides an exemption from real and tangible personal property taxes and assessments for an exempt energy air quality facility certified by the Ohio Air Quality Development Authority (OAQDA).
· Defines an “exempt energy air quality facility” as any renewable energy project under the OAQDA law for which an application is filed with the Ohio Power Siting Board, or upon which construction or installation is commenced, on or after January 1, 2010, but on or before December 31, 2011, and that is placed in service on or before December 31, 2012.
· Requires the OAQDA to certify that the construction and operation of an exempt energy air quality facility creates and maintains the number of jobs during construction and each year that the facility is in service that are projected by the Job and Economic Development Impact (JEDI model) defined in the bill.
· Requires an owner of an exempt energy air quality facility that is exempt from taxes and assessments under the bill to (1) pay annual service payments in lieu of taxes to the treasurer of the county where the facility is located in an amount equal to $5,000 or $6,000 per megawatt of name plate capacity depending on the number of owners, (2) offer to sell power or renewable energy credits first to electric distribution utilities and electric service companies subject to the alternative energy portfolio requirements of current law before offering the power and credits to others, (3) restore all roads affected by facility construction, and (4) provide for training and equipment to fire and emergency responders to enable them to respond to emergencies related to the facility.
· Includes a limited liability company among those entities that may be owners of air quality facilities or exempt energy air quality facilities under the OAQDA law.
I would expect Senator Goodman to sponsor such legislation, as he is a proud anti-gun, pro-gay marriage, tax-hiking Republican and has a long history of being out of step with the principles of his party.
But Senator Jones? Didn’t she just run a campaign about how she was the far more conservative choice for the Ohio Senate? The election was only a week ago, so maybe all of Jones’ conservative skeptics, such as former State Rep. Tom Brinkman, had a point!
In committe, the bill was opposed by Senator Jim Hughes and Karen Gillmor. And a few others, such as Senator Buehrer probably won’t vote for it. But this is the sort of tax code change which doesn’t cut taxes across the board to spur economic growth, while handing the Governor an unexpected political victory.
What is going on here?