Tim Griffin, R-District 2, and Rick Crawford, R-District 1 both echoed the same line in this year’s debate over the fiscal cliff package, which contained a renewal of the Production Tax Credit. The PTC has been the driver in renewable energy development that has created millions in wind power investment in Arkansas. While the fiscal cliff package eventually passed both houses and was signed into law, the bickering in Congress compelled investors to abandon several projects on the Delta.
Both Crawford and Griffin are betting on comprehensive tax reform to resolve the issue. With the current state of Congressional gridlock, it’s too late. Wind power companies have run out of patience with the on-again, off-again renewal of the PTC. They are reducing their investments, closing plants and laying off Arkansans.
Here’s the deal. Griffin and Crawford both said that they supported renewal of the PTC while voting against the fiscal cliff package that contained it. So they can say to voters that they supported the PTC, and also say to the party that they voted against the fiscal cliff package. They stayed true to their party but their community and state suffered for it.
Governor Mike Beebe was irate. Both of Arkansas’s senators, David Pryor and John Boozer supported the bill, voted for it, and argued for a long-term extension so that businesses could plan for the future and not be subjected to the whims of a dysfunctional Congress.
Here are comments from the main players:
“Nordex’s departure is directly related to Congress’s inability to follow through on an alternative-energy policy they started and now can’t agree on. I have been saying for years that there must be stable tax policy with this kind of intense capital investment. Congress has totally failed to provide one, wavering year-to-year on the wind energy tax credit. This indecisiveness is costing Arkansas, and America, jobs,” he said.
“Fortunately for taxpayers, Nordex has been a model corporate citizen, and is repaying Arkansas incentives that the company received when operations began. Nordex is not completely leaving Jonesboro, and I hope future conditions will allow American production to resume,” Beebe added. “I am so fed up with Congress. I think the American people and Arkansans are fed up with them, too.“
“Nordex’s decision to close its plant is disappointing and my heart goes out to those affected, but blaming Congress, while convenient, is also misguided: The House is working on bipartisan tax reform to produce a simpler, fairer pro-growth tax code so we can stop jobs from moving overseas,” Griffin said in a statement to Arkansas Business.
“Also, the wind industry’s tax credit that has been in place since 1992 – more than 20 years – was extended in January, and the industry supports phasing it out. Ultimately, Nordex’s decision underscores the pain American workers are feeling as a result of failed policies.”
“Tax credits such as the wind tax credit cannot go on forever, but there must be a longer term extension in place so that companies like Nordex and Mitsubishi can grow and put Arkansans to work,” Boozman said. “I support the credit, have voted for the extensions, and would like to see the wind tax credit authorized for a longer time period to provide certainty to business owners. However, until we tackle major tax reform in Washington, this problem will exist.”
“The Nordex announcement is another wake-up call for Congress to take action instead of dawdling.
Our nation is in a huge financial mess due to decades of borrow-and-spend policies implemented by both political parties, which make it extremely difficult to provide certainty for most sectors of our economy including energy, agriculture, health care, and small businesses,” Crawford said.
“I’ve always supported the renewable energy production tax credit. Unfortunately, some in Congress believe we should cut funding for renewable energy. I hope we’ll consider a long-term production tax credit as part of comprehensive tax reform. These companies need more certainty than a one-year extension.”
Note: The PTC has been in place since 1992 but is renewed yearly, not long enough for companies to develop long-term financial investments.
