newjerseynewsroom.com

BY STEPHEN C. FEHR

STATELINE.ORG

Wyoming Governor Dave Freudenthal shot ahead of the wind-state pack by becoming the first chief executive to back a tax on wind energy.

Maybe he can take that risk because he is barred from seeking a third term and announced Thursday (March 4) that he will not challenge the term limit as he once had considered. Funny how term limits free politicians to take stands they might not otherwise. Pennsylvania's Governor Ed Rendell, also a lame duck, has been traveling around the state promoting tax increases to balance the state budget.

Freudenthal, an easygoing lawyer who will have more time next January to return to his hobby restoring sheepwagons and Airstream trailers, says politics does not enter into his thinking. Imposing an excise tax on wind-energy production is a question of fairness, he says, and his Legislature agreed.

"Wyoming has a fairly long history of setting the terms under which companies can extract energy from the state that's premised on the obligation of the companies to handle the impacts, take care of reclamation and contribute to the well-being of the state," says the Democratic governor. "Wind energy is no different." He was interviewed recently by Stateline.org while in Washington for the winter meeting of the National Governors Association.

As you would expect, the wind-energy industry opposes the governor's proposal to charge the $1-per-megawatt-hour tax. But some of Freudenthal's fellow wind-state governors, including Democrats, say the tax would impede development of a nascent green industry viewed as a key alternate power source. They see an opening to gain a competitive edge on Wyoming regardless of the merits of the tax.

"I think Wyoming should make the tax higher so companies will come to Montana," says Governor Brian Schweitzer of neighboring Montana, another top wind-energy state. "We need to embrace wind energy and offer incentives, not tax it."

Another Democratic governor, Washington's Christine Gregoire, is pushing a package of tax increases and spending cuts, but not on wind energy. "Right now, I'm trying to promote wind energy. If I tax it, I believe it will do the opposite," she says.

Colorado Governor Bill Ritter, a Democrat who is not seeking re-election this fall, says his state is evaluating a wind-energy tax, but stressed that does not mean he supports it. "I'm not ready to talk about it," says Ritter, who has carved out a reputation nationally as an energy governor because of his forward thinking on renewable energy.

Freudenthal says he is not surprised by the pushback. "I would expect Brian to say that," he says of Schweitzer. He has had an easier time convincing his own Republican-controlled Legislature of the advantages of a wind-energy tax. Both chambers recently approved it and sent it back to him to sign.

Mineral and farm commodities are the backbone of Wyoming's economy. A Republican governor, Stan Hathaway, shepherded Wyoming's first severance tax on minerals in 1969 and headed an initiative to create a permanent trust fund in which severance tax money is invested and put back into state government operations.

Freudenthal's plan is to split the wind-tax revenues, initially estimated at about $4 million a year, between the counties (60 percent) and the state (40 percent). He first called for a $3-per-megawatt tax and 60 percent to the state, but lawmakers revised the proposal.

"Part of the pitch I made was this is the first opportunity in my lifetime to diversify our tax base," Freudenthal says.

Critics say the industry's threat to leave the eighth windiest state for more tax-friendly states is baseless. Why would they be any more special than the oil, natural gas, uranium and coal industries that pay state taxes at a higher percentage?

No one wants those massive turbines in their backyard, the governor says, but if companies are going to put them up, it seems reasonable they should pay for the environmental damage they cause. "Lighten up guys," Freudenthal says of his industry opponents. "This is business."

STATELINE.ORG