Missouri Town Hikes Taxes for Green City Hall

Published June 1, 2006

Citizens of Cottleville, Missouri will be forced to pay an extra one-half percent sales tax to finance a “green” city hall, under the terms of a proposal announced by city administrators.

The tax hike, economists note, illustrates the economic costs associated with feel-good environmental gestures.

In return for the tax hike, citizens will receive a single 15,000 square foot building and adjacent park. Costly environmental gestures include solar collectors, wind turbines, and rainwater collectors.

Price Is Steep

The steep price of Cottleville’s environmental gestures does not surprise Todd Myers, director of the Center for Environmental Policy at the Washington Policy Center.

“Up-front costs are usually higher than official projections. Projected savings are typically much less than projected,” Myers said. “Any proposed tax increase, which is costly even by initial estimates, is likely to be insufficient to fund a green building project.

“In fact, most businesses–which are by definition more cost-conscious and efficiency-oriented than government–have shied away from green building standards,” Myers said. “According to the California Green Building Task Force, 16 percent of new government buildings follow green building standards, while only 1 percent of new commercial buildings follow green building standards. If green buildings were as cost-friendly as environmental activists claim, surely more than 1 percent of commercial businesses would adopt them.

“The reason why governments are more likely to adopt these costly measures is they are spending somebody else’s money while claiming a societal benefit that is in fact quite insignificant,” Myers added.

Meadowlands Going Solar

Illustrating Myers’ point, the New Jersey Meadowlands Commission, part of the state’s Department of Community Affairs, on April 10 unveiled a plan to install $25 million to $30 million of solar panels in the northern New Jersey wetlands region.

According to an April 10 news release by commission chair Susan Bass Levin, “The economic benefits of renewable energy, combined with the environmental reasons to pursue this endeavor, make our choice about bringing this industry to the Meadowlands District an easy one. Everyone who pays a utility bill knows that no matter what season, the cost to power our homes and businesses continues to rise. Renewable energy has the added benefit of providing a stable source of energy that won’t fluctuate in price according to world events or shortages in materials.”

The plan calls for solar panels on building roofs, on parking lots, and even in wetlands and restored landfills.

“This project is necessary,” Levin said, because “we need to look for alternative forms of energy so that we are not dependent on foreign oil.”

Comparing Apples and Oranges

Industry analysts, however, point out few electrical plants are powered by oil. American-produced coal powers most plants. Moreover, “the United States is the Saudi Arabia of coal,” observes the U.S. Energy Information Administration on its coal Web site.

And whether it is competing with oil, coal, natural gas, or virtually any other source of electrical power, solar is substantially more expensive than its competitors, economists point out.

“Solar power, even in ideal collection locations such as California’s Mojave Desert, is nowhere near economically competitive with coal,” said Tom Tanton, a senior fellow at the Institute for Energy Research. “And New Jersey, being much farther north and much more cloudy than the Mojave Desert, is far from an ideal solar collection location. Expect costs to be much higher for this [Meadowlands project] than even the already prohibitive costs of current solar power generation.”

More Expensive in Colo.

In Colorado, Xcel Energy began assessing its customers a monthly surcharge to pay for the small amount of electricity it generates from solar collectors as required by Colorado’s renewable power mandate.

“Because solar energy is up to four times more expensive than fossil fuels, power companies asked the [Colorado Public Utilities Commission] for more money to pay for the mandate,” reported the February 23 Denver Post.

James M. Taylor ([email protected]) is managing editor of Environment & Climate News.