Public Service Commissioner Clyde Holloway and the renewable energies industry faced off before legislators Monday on the merits of a solar energy tax credit.
Holloway warned members of the Revenue Study Commission that the tax credit could become a state budget buster unless limitations are added.
“If you don’t put a ceiling on this somewhere, there’s no end to this,” Holloway said. “I think it could go to hundreds of millions of dollars as time goes on.”
Tucker Crawford, with the Gulf States Renewable Energy Industries Association, countered that the credit creates job growth, which should be allowed to spiral out of control.
“Yes, there’s fiscal impact,” Crawford said. “But we’ve also created direct and indirect full-time jobs, hundreds even thousands by now.”
At issue is a tax credit for expenses tied to the purchase and installation of wind or solar energy systems. The credit applies to 50 percent of the first $25,000 in purchase or installation expenses. The state Department of Revenue estimates the credit will reduce state government revenue by more than $13 million in the current fiscal year that ends June 30.
The Revenue Study Commission discussed the credit Monday as part of a larger review of hundreds of tax exemptions on Louisiana’s books that divert billions of dollars from the state budget. With state government struggling to pay its bills, the commission wants to determine if the exemptions still meet their intended goals.
Holloway, of Forest Hill, complained that an amendment passed by legislators allowed the solar power tax credit “to go crazy.”
He said now contractors from California and other states can install systems through a lease and receive the credit.
State Rep. Walt Leger III, D-New Orleans, pointed out that the renewable energy industry is being characterized as booming.
“I just want to make sure ... that we talk about the benefits, all that payroll, all those jobs,” he said.
Holloway said he is merely advocating a cap.
“It is a scary situation if we’re not careful,” he said.
Crawford, who is a solar installer, said the tax credit benefits the homeowner by lowering energy bills and creating more disposable income.
He said there were four or five solar companies several years ago licensed by the state contractors board to do business in Louisiana. Now, Crawford said, there are 192 licensed companies.
“By default, it’s grown an industry,” he said.
During the meeting at the state Capitol, state Agriculture and Forestry Commissioner Mike Strain also came to the testimony table to detail the history of a milk producers tax credit.
The credit, which is expected to reduce state government revenue by $1.6 million this fiscal year, comes into play when the cost of production exceeds the price a dairy farmer receives for milk.
No individual dairy farmer can receive more than $30,000 in credits each calendar year.
Strain said the credit stems from a time in which the state was losing an average of one dairy farm a week. Now the state has 144 dairy farmers, he said.
“We’ve stabilized the dairy industry,” Strain said.
St. Helena Parish dairy farmer Eugene Robertson told legislators the dairy farm industry needed to be stabilized to persuade younger generations to take over family farms and ensure a fresh local milk supply.
Being a dairy farmer is a seven-day-a-week job, he said.
“Cows don’t know when Christmas is,” Robertson said.