SHANNA DRAHEIM | Guest column

OPINION: Tax reform efforts in Lansing could hurt Michigan's wind energy industry

Posted on Tue, May 8, 2012 : 8 a.m.

The Legislature's move to eliminate Michigan's personal property tax for businesses could hurt the state's wind energy industry by eliminating the incentives for local governments to site wind farms.

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As Michigan lawmakers grapple with how to create jobs and a positive business climate, new tax reforms shouldn’t stall the economic progress we’ve already made.

A perfect example of this is the proposed personal property tax reform and its impact on Michigan’s wind industry. Wind energy projects are under way in all regions of the state, from the Upper Peninsula to the Thumb and across several portions of western and central Michigan. According to the American Wind Energy Association, at least 31 facilities statewide manufacture components for the wind energy industry and an additional six facilities are planned.

In Saginaw, the Merrill Technologies Group has made a significant investment in the manufacturing of turbines. In Monroe, Ventower Industries opened the state’s first wind tower manufacturing facility on a former brownfield site. Estimates are that Ventower may eventually employ as many as 300 people. Much of this progress is due to the current tax system, which provides predictable revenue from wind energy projects to local governments and makes the projects appealing to local communities.

An eight-bill personal property tax reform package - designed to improve the state’s business climate and jobs outlook - passed the Senate Finance Committee on May 1 and could have unintended consequences for Michigan’s wind industry by changing the economic benefits to local communities from the siting of wind facilities.

If communities lose this incentive to support wind projects, it could make it more difficult for Michigan to reach its goal of having 10 percent of its energy from renewable sources by 2015. Some potential ways to avoid this would be changing the way wind energy facilities are classified under the General Property Tax Act or developing a separate wind generation based tax.

Community leaders across the state should feel confident that wind energy can provide not only a stable base of tax revenue but -- perhaps more importantly -- a steady source of employment for the next generation and beyond.

So, as lawmakers continue to debate the personal property tax reform issue and look to create jobs and improve our business climate, we urge them to identify all industries where growth is taking place to avoid unintended consequences.

Shanna Draheim is a senior consultant for Public Sector Consultants, a Lansing-based research and program management firm, with specialties in governance and regulation, health care, education, energy, and environmental policy.