Planes, wind and data centers: Legislature in stretch run

Planes, wind and data centers: Legislature in stretch run

By Paul Hammel April 24, 2013 11:43 am Comments

There’s plenty of big issues ahead for the Nebraska Legislature, but chatter recently has focused on whether the state needs to buy a state plane, harness more wind energy and provide more incentives for data centers.

Data centers are highly sought by Midwestern states, because they have a lot of things sought by such computer complexes: cheap electricity, cheap land and lack of catastrophic natural disasters, like hurricanes and earthquakes.

Iowa and Nebraska recently engaged in an economic development tug-of-war over a billion-dollar data center planned by Facebook.

In the beginning, it sounded like the social-networking giant would locate in Kearney, Neb.,  which had invested over $1 million on a shovel-ready site. But Altoona, Iowa, a suburb of Des Moines, won out. Maybe the nearby Adventureland amusement park will now be adding a social media ride.

It was a plumb for Iowa, but one has to wonder whether taxpayers are getting a great bargain from data centers. The state tax incentives from Iowa totalled $18 million spread over several years, and Facebook will create about 30 jobs. That’s a pricey $600,000 per job. And Altoona waived any property taxes from the company for 20 years.

That bang-for-the buck issue will likely come up Wednesday when state lawmakers finally start debating a bill to provide a new tax break for large wind farms that locate in Nebraska. The state has lagged behind its neighbors in attracting wind farms, despite abundant wind. LB 104 seeks to remedy that by providing a tax break offered by our neighbors: a sales tax exemption on the purchase of turbines, towers and other wind farm components.

But wind farms aren’t great generators of jobs, either. But they bring other benefits, like generous lease payments to local landowners, which can boost the economy in rural areas.

Iowa officials said that the more abundant wind farms in the state were attractive to Facebook, which has a goal of powering 25 percent of its data centers (which are huge consumers of electricity) from wind or other renewables. Nebraska, which has about 1/12th the wind power as Iowa, missed an opportunity, said the Sierra Club in a press release.

As for the state plane, some interesting politics afoot there. The Legislature’s Appropriations Committee initially rejected the idea of buying an old plane from the University of Nebraska Foundation for $2.2 million, citing less expensive options (like chartering planes).

But some votes switched, and now the plane purchase — a priority of Gov. Dave Heineman — has taken flight and is part of the proposed budget.

The governor needs a plane and a way to get to the remote corners of the state. But if you talk to plane people, they’ll tell you there are better bargains out there, for newer planes.

The background chatter is raising questions about whether the plane issue might be more about the trappings of office and helping out the NU Foundation than finding the best deal.