DES MOINES | A tax break that is credited with producing renewable energy and jobs in Iowa is being targeted by conservative groups calling for its elimination.
The federal wind energy production tax credit is one of many tax incentives being considered by Congress before its session ends next month.
Iowa has become a national leader in wind energy production, and the state and federal tax credits are lauded by those in the industry.
But some groups say the tax break provided to wind energy producers should be eliminated.
Americans for Prosperity, a national organization that promotes free-market ideals and is funded by the conservative billionaire industrialist Koch brothers from Kansas, recently launched a print advertising campaign in eight states. (Iowa is not among them.)
The literature implores citizens to encourage federal lawmakers to call their congressional representative and urge him or her to vote against extending the wind energy production tax credit. The ad states that extension of the tax break “will cost $13 billion over the next decade.”
“Americans have been on the hook for these wind subsidies for two decades with little to show for it,” Americans for Prosperity federal affairs director Brent Gardner says in a statement on the organization’s website. “While large corporations have gotten comfortable collecting our tax dollars, the industry hasn’t made it in the market, failing to produce long-term job creation or energy affordability.”
Another group, the American Energy Alliance, which is also encouraging citizens to pressure their congressional leaders, calls the wind energy production tax credit “a key part of President Obama and (U.S. Senate) Majority Leader (Harry) Reid's attack on affordable energy, from natural gas and coal to nuclear power.”
Supporters say wind energy is a clean, renewable energy source that helps reduce America’s dependency on foreign oil.
Iowa produces more than a quarter of its energy from wind, and the industry employs roughly 7,000 people around the state.
Americans for Prosperity’s state director said Iowans can hope for the best for wind energy production in the state while opposing tax breaks for the industry at the same time.
“I think there are a growing number of Iowans that would love to see the wind energy industry succeed but also oppose the (tax break),” Drew Klein said in an email to the Lee Enterprises Des Moines Bureau. “After more than 20 years of this subsidy I think taxpayers are ready to let the industry stand on its own.”
U.S. Sen. Chuck Grassley, R-Iowa, who authored the tax credit in 1992, says he is open to the eventual elimination of the incentive. But he says it should be phased out, not eliminated all at once.
“I know it won’t go on forever. It was never meant to, and it shouldn’t,” Grassley said recently in remarks on the U.S. Senate floor. “I’m happy to discuss a responsible, multi-year phaseout of the wind tax credit. In 2012, the wind industry was the only industry to put forward a phase-out plan.
“But any phase-out must be done in the context of comprehensive tax reform, where all energy tax provisions are on the table. And it should be done responsibly over a few years to provide certainty and ensure a viable industry.”
According to a spokesman for U.S. Rep. Dave Loebsack, D-Iowa, the wind energy tax credit currently is in bills being considered in both chambers. The Senate’s bill extends the credit for two years; the House’s version, which was unveiled Tuesday, extends it for one year.