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New Report Looks at Tax Revenue Generated by Clean Energy

Parul Dubey on October 17, 2017 - in Energy

Lyons, Neb. – The Center for Rural Affairs has released a report examining state statutes governing revenue collection and distribution from energy transmission projects at the local level.

The report is authored by Johnathan Hladik, Center policy program director, and Timothy Collins, former assistant director of the Illinois Institute for Rural Affairs and rural development expert.

“Generation and delivery: the economic impact of transmission infrastructure in rural counties,” takes a look at three recently constructed projects in Upper Midwest and Great Plains states. Together the cases demonstrate varying approaches to the use of tax revenue generated by newly built transmission infrastructure.

“There is considerable variation in the flow of revenues from power lines,” Hladik said. “While the significance of renewable energy to rural economic development is well understood, less is known about the impacts of transmission development on rural economies.”

The report found:

  • Each approach reflects the different priorities and fiscal realities of the administering state. Some states leave it to the county’s discretion on how to apply the revenue to their budget.
  • Communities affected by transmission development realized significant benefits only when state law allows for most or all of the revenue from projects to be invested locally.
  • Current property tax laws tend to constrain some counties’ ability to take advantage of revenue from new transmission line development.

“Our report demonstrates that when states grant community stakeholders the power to decide how and where new revenue was used, they maximize benefits to residents,” said Hladik. “As these communities are on the front lines of any development, residents must have a role in determining how and when this increased revenue is put to use.”

To read the full report, visit www.cfra.org/GenerationAndDelivery.

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