Wind farm tax boost projected at $1.2M

Property taxes from the Palouse Wind project will generate $1.2 million for Whitman County’s operating fund over the next 20 years, Assessor Joe Reynolds said Monday.

“This is a key piece of consideration as it relates to how we are going to finance our capital projects,” said Administrative Director Gary Petrovich.

That figure is important to the $57 million 2012 budget because commissioners are planning to delay several capital improvements and pay for them with bonds that would be covered the additional tax revenue from the wind farm.

Initial projections from county officials predicted $1.6 million in wind farm property taxes.

Reynolds said several state and federal tax incentives for turbine farm developers reduced the amount the county could collect from the $104 million worth of turbines expected to be sited on Naff Ridge, Granite Butte and Steam Shovel Hill in northern Whitman County.

“You’ve got to take a third of that right off the top,” said Reynolds.

A federal tax exemption, he said, knocks 30 percent off the assessed value. State regulations require the county depreciate the turbines’ value 8.5 percent each year for the next 20 years.

The county will begin collecting taxes from the turbines in 2014. Palouse Wind contractors are currently preparing the site for next summer, when the turbines are expected go up.

Reynolds figured the initial year would generate $107,604 for the current expense fund, decreasing every year until 2035, when the turbines would provide the county $23,000 in property taxes.

Other taxing entities like the Oakesdale, Rosalia and St. John schools, cemeteries and fire departments, will receive additional taxes, as will the county road department.

“I was a little disappointed in that figure,” said Commissioner Greg Partch. “But we’re building a larger base for our economy. The real winners here are the schools, the fire districts, the cemeteries.”

Commissioners held their first public hearing on next year’s budget in a seven-minute session Monday night.

Next year’s budget was balanced by removing three high-priced expenses from the $12.9 million current expense operating budget.

Commissioners plan to put new heating and air conditioning systems in the jail and information technology building, remodel portions of the courthouse and purchase IT hardware next year. Those items total $790,000.

They are considering issuance of general obligation bonds to come up with the funding.

The courthouse remodel and IT hardware were initially slotted to take $353,000 from the 2012 operating budget.

With those items included, the county was looking at a 2012 deficit of $401,155.

That gap could be offset by leftover cash reserves commissioners dedicated to balance the 2011 budget. When the current year’s spending plan was approved, commissioners decided to balance it with $330,000 from the reserve funds.

Petrovich reported 2011 at this point appears to need about $220,000 of the reserve fund to balance. That would leave $110,000 which the commissioners could use next year, enough to fill the $47,000 hole.

Financial Administrator David Ledbetter noted during Monday’s hearing that the county’s revenue for 2012 is expected to be up about a half-million dollars.

“I don’t think there are very many counties across the state that can say that,” he added.

Sales taxes on construction at the wind farm will generate about that amount, and WSU’s planned $80 million renovation of Martin Stadium should also pump up the county’s tax revenue.

Commissioners will hold one more hearing on the budget, at 11 a.m. Dec. 19, before giving it the final thumbs-up.