New Moody’s report: Wind power boosts local tax revenue across rural America
By now it should come as no surprise that American wind power spurs important economic growth in all 50 states, especially in the rural interior of the country. Each year, the industry invests an average of over $14 billion in new wind projects and pays landowners more than $267 million for hosting wind turbines on their property – not to mention employing over 100,000 Americans.
But there’s a lesser told story that’s just as important, and a new report sheds light on this neglected subset of wind benefits.
New analysis from Moody’s highlights the ‘windfalls to local governments across [the] U.S.’ that growth in wind energy supplies, mainly by substantially boosting local taxes bases and revenue in rural areas.
“What we’re seeing is wind farms generate new operating revenues, lower the tax burden for local residents,” Moody’s analyst Frank Mamo told Reuters. “In many cases, local governments are using this new money to address what was a growing backlog of deferred capital expenditures.”
Consider this: 10 years ago just a handful of states and a few hundred counties had wind farms. In the time since, wind has grown quickly, adding 64 gigawatts (GW) of new wind power capacity, and today, there are wind farms in 41 states and over 400 counties. The U.S. now has enough installed wind capacity to power 27 million American homes. This expansion has propelled tax base growth and created new tax revenue for state and local governments hosting the wind projects.
To better understand the benefits wind farms provide to local governments, let’s consider three case studies that Moody’s highlights:
Adair County, Iowa
Wind power is ubiquitous in Iowa – nearly half of Iowa’s counties contain at least one wind farm and the state ranks third in installed wind power capacity. Across Iowa, these wind projects add to a county’s tax base and pay property taxes. As a result, Adair County has seen its tax base grew over 30% between 2009 and 2018, and is expected to continuing growing as projects are fully assessed and new wind farms are built.
Jackson County, Minnesota
Counties in Iowa’s neighbor to the north also benefit from wind farms. A state-wide tax on wind provided $12.7 million last fiscal year, up more than three-fold from 10 years ago. At the county level, wind farms supply an average of 6% of general fund revenues – a tremendous share for a single industry. Jackson County – one of the most active counties for wind farm development in Minnesota – received $1.9 million in tax revenue from wind farms in 2017, 16% of total revenues. And that number is expected to grow to $2.2 million in 2018.
Down south, wind projects in the Lone Star State help service debts for school districts. While a property tax incentive designed to promote wind project investment and job creation in the state minimizes the amount of property tax that wind farms pay, it does not mean that these projects do not provide significant tax benefits. To the contrary, a debt service levy on wind farms helps school districts service their debt burdens.
Just look to Webb Consolidated Independent School District, where wind farms pay over 40% of the district’s annual debt bills. This greatly reduces the tax burden on local taxpayers and helps the school district to continue to invest in and improve its schools.
These are just three examples in three states that highlight the local economic benefits wind farms provide to rural America. The wind development pipeline remains high, so wind will continue investing in rural America and adding revenues to local governments for years to come.