By Larry Gerdes, BCR News Guest Editorial
A well-rehearsed claim repeatedly trumpeted by wind project developers, and those wanting to join with them, promises substantial new property tax revenues as a windfall for our schools and counties.
This argument becomes a tool used to disarm those neighbors who are opposed to these mammoth towers and the disruption to this agricultural community. As I have investigated these claims of promised new tax revenues, I was struck by what is not shared: Subsequent appeals of the taxes, attempts to claim the turbines are not real property and affects of accelerated depreciation on these turbines thereby rapidly reducing the taxable value. Once the projects are built (and all of the exceptions to the zoning ordinances are repeatedly granted), the taxing jurisdictions have lost any leverage over these developers. Almost certainly, the recent legal action involving a developer’s dispute under a road agreement is revealing of what the county should expect soon after projects are built.
Most of all, however, it was surprising to learn the current tax law pertaining to wind projects expires in 2011, with no guarantee it will be extended. In light of what may have been little understood by many of us, my lawyer, Richard S. Porter, has delivered a letter (see excerpts below) to Roger Craine, chairman of the board at Bureau Valley School District. My attorney’s intent is to identify the flaw in the claim advanced by advocates for these projects as most recently reported in an article in the Bureau County Republican regarding the promised tax revenues from the Walnut Ridge project south of Walnut and the newly proposed project (the Green River project) north of Walnut.
“My client, Larry Gerdes, asked me to send you this quick note regarding the current statutory provisions for taxation of industrial wind turbines such as being proposed in your area. I am an attorney who has represented citizen groups and local governmental bodies concerning zoning requests by turbine companies. I have learned that the tax revenue is far from assured. Please take a few minutes to digest this information while you decide whether this is a project you should really be supporting.
“The law which governs the taxation of a wind energy devices is found at 35 ILCS 200/10-600 through 10-620 … This law provides there will be a $360,000 assessed value per megawatt of main plate capacity of a wind turbine. Depending on your local tax rate, I have been told this usually equates to somewhere around $9,000 of taxation for a 1.5 to 2 megawatt turbine at least in the first year. However, what the statute goes on to state is that the turbine company is entitled to depreciate those turbines down to as low as 30 percent of the trended real property cost basis. I have been told in another county that the tax revenue will be reduced every year and be 42 percent less by year 2018.
“The turbine companies also often fail to mention this statute has a”sundown provision” of 2011. Therefore, by its own terms, the statute does not apply after 2011. In the past, turbine companies have often argued wind turbines are personal property rather than real estate, and are therefore, not subject to real estate taxation at all. This argument is actually very viable as the wind turbines themselves are merely bolted to a cement pad and can be removed in a matter of hours. The turbine companies will be free to argue after 20111 that only the cement pad (which is virtually valueless) is real estate. Similar arguments have been successful by nuclear power companies in Illinois. Experts in the industry have also confided that there is also the very real risk that turbines will become exempted from taxation altogether as pollution control devices.
“Finally, as a school board member I am sure you are very concerned about the welfare of the kids in the area. I urge you to educate yourself to the physical and mental complaints that many children endure from living in close proximity to the noise and visual disturbances that accompany industrial wind turbines including sleep deprivation which severely impacts health and concentration.”
I hope you consider all of this information as you decide whether to support this dramatic change to your local community and its landscape.