Jonathan Small | February 20, 2016

Free Market Friday: Winded by subsidies

Jonathan Small

Fiscal calamity is brewing and Oklahomans will be hurt without decisive action. State policymakers must end the state’s wind subsidies and other detrimental policies regarding wind energy production.

Recently Preston Doerflinger, Oklahoma’s secretary of finance, administration and information, issued a concerning report. Further revenue declines have transpired and there is a grave fiscal threat, the payment of wind energy production subsidies by way of the state zero-emission tax credit.

According to the report, “In addition to low oil prices, unexpectedly high wind production tax credit costs have caused further revenue reductions. The $44.7 million cost for wind incentives to date in FY 2016 is an approximately 83-percent increase over the same period in FY 2015, which puts further strain on state revenue collections already weakened by the effects of low oil prices.”

“The increased cost of wind production tax credits was a large contributor to corporate income tax refunds exceeding corporate income tax collections in October, November and December. January marked the first month since October that the state did not have to transfer monthly personal income tax collections to pay monthly corporate income tax refunds.”

Doerflinger also noted, “It took until January to pay personal income tax back for the money that was borrowed mostly to pay those wind tax credit claims that started in October.”

Oklahoma personal income taxpayers are footing the bill and supplying loans to make payments for wind energy production. President Barack Obama failed to win majority support in all 77 counties in Oklahoma, yet Oklahoma’s tax policy is helping him implement his damaging alternative energy scheme designed to make utility costs “necessarily skyrocket.”

Thanks to the far larger federal wind subsidy scheme and also Oklahoma’s subsidy, which is based off wind energy generation, a lot more wind turbines will be built. This will balloon state zero-emission tax credit liabilities to approximately $88 million next year.

Our current policy toward wind generation unfairly picks winners and losers, artificially driving up use of wind production, all on the backs of Oklahomans.

Given the insaneness of the zero-emission tax credit, especially now, it’s an understatement that state policymakers should end the tax credit for new projects.

It’s time for policymakers to prevent Oklahomans and our economy from being further winded by subsidies and other damaging related policies related to wind energy production.

Jonathan Small President

Jonathan Small


Jonathan Small, C.P.A., serves as President and joined the staff in December of 2010. Previously, Jonathan served as a budget analyst for the Oklahoma Office of State Finance, as a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department. Small’s work includes co-authoring “Economics 101” with Dr. Arthur Laffer and Dr. Wayne Winegarden, and his policy expertise has been referenced by The Oklahoman, the Tulsa World, National Review, the L.A. Times, The Hill, the Wall Street Journal and the Huffington Post. His weekly column “Free Market Friday” is published by the Journal Record and syndicated in 27 markets. A recipient of the American Legislative Exchange Council’s prestigious Private Sector Member of the Year award, Small is nationally recognized for his work to promote free markets, limited government and innovative public policy reforms. Jonathan holds a B.A. in Accounting from the University of Central Oklahoma and is a Certified Public Accountant.

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