In cash-strapped Elbert County, county commissioners are reconsidering a tax philosophy that has left public coffers drained while a neighboring county reaps big bucks.
Elbert County wasn’t able to cash in like Lincoln County when a new wind farm that straddles both counties became operational in December.
Lincoln County had a use tax on each wind turbine and netted $2 million before the wind farm became operational.
Elbert County didn’t see a dime from any such tax. A few years ago voters approved a sales-tax hike, a measure that also had a provision that the county could not tax equipment on new projects because it wanted to be business friendly.
But that may change.
Commissioners are discussing placing a measure on the November ballot asking for such a tax, maybe 1 percent of the cost of the equipment, Commissioner Kurt Schlegel said.
Given that Elbert County and future revenue from property taxes is expected to decrease, any new money would be welcome in this county of only 22,000 residents.
“We just keep circling the drain, and it’s unfortunate,” Schlegel said.
Schlegel said the three-member county commissioner’s board will discuss placing the tax issue before voters at an upcoming meeting.
The majority of the Limon Wind Farm is in Lincoln County. Of the 125 wind turbines, 104 are in Lincoln County and 21 are in Elbert County, said David Winchester, site manager for the wind farm that is operated by NextEra Energy of Florida.
John DeWitt, land use manager for Lincoln County, said the county can charge up to 2 percent in use taxes of the cost of new equipment. For the Limon Wind 1 farm, the tax was 0.98 percent, and it netted the county a cool $1.9 million.
“Typically it’s 2 percent, but it’s negotiable,” DeWitt said. “The commissioners agreed that was too high.”
Had Elbert County installed a 1 percent use tax per turbine, it would have resulted in just under $400,000 based on the amount that Lincoln County received.
That would have come in handy right about now.
Schlegel said the county has projected a likely decline in property taxes based on property valuations, which are expected to go down.
This year will be a tough one, Schlegel acknowledged. But some other tax breaks the county gave to the wind farm expire next year so Elbert County will need to buckle up to make it through 2013.
There are some concerns regarding the Taxpayer’s Bill of Rights on whether the county could pursue the machine-use tax. Elbert officials must also weigh whether whether the money would go into the road and bridge fund or the general fund.
Regardless, it looks like the voters could get a chance to implement a machine tax for future developments.
“It would be up to the people to remove that exemption,” Schlegel said.
Carlos Illescas: 303-954-1175, cillescas@denverpost.com or twitter.com/cillescasdp
