Contact: Joshua Morby 414.791.9120
Study examines cost of biofuel tax credits while disregarding benefits
MILWAUKEE – A new report from the Congressional Budget Office (CBO) on the cost to taxpayers of biofuel tax credits – including the Volumetric Ethanol Excise Tax Credit (VEETC) – is deeply flawed, failing to take into account any of the economic benefits of biofuel production or the benefits of offsetting fossil fuel use, the Wisconsin Bio Industry Alliance (WBIA) said on Thursday.
“Maintaining the federal biofuel tax credits is crucial for our economy, particularly here in Wisconsin,” said Joshua Morby, Executive Director of the WBIA. “In order to fully analyze the merit of these tax credits, the CBO must look at the larger picture of the environmental costs of fossil fuels, as well as the new jobs and economic activity generated as a result of domestic renewable fuel production. But examining all the costs with none of the benefits does not paint a realistic picture of the outcome of the tax credits.”
The CBO report, titled “Using Biofuel Tax Credits to Achieve Energy and Environmental Policy Goals,” fails to examine the return on investment of every dollar in biofuel tax credits, which is currently more than two dollars in increased GDP and tax revenue.
The VEETC provides a 45-cent tax credit for each gallon of ethanol used by blenders to combine with traditional gasoline. The tax credit is set to expire at the end of this year unless Congress extends the incentives by passing H.R. 4940 and S. 3231.
According to a study released earlier this year by the University of Missouri, if the tax credits are not extended, within three years Wisconsin would lose over 13,000 jobs and nearly $2.4 billion in economic output as a result of direct and indirect damage to the state ethanol industry.
“These tax credits have the support of the overwhelming majority of Wisconsin biofuel producers, and we’ve already begun reaching out to legislators in Washington to explain their importance for our state,” Morby said.
Morby and Robert Sather, President of the WBIA, traveled to Washington in April to meet with members of Wisconsin’s congressional delegation to discuss the tax credits. Most recently, representatives from the bio industry in Wisconsin spoke with Rep. Ron Kind, who sits on House Committee on Ways and Means.
The full CBO report is available at http://www.cbo.gov/doc.cfm?index=11477&type=1.
The Wisconsin Bio Industry Alliance is a diverse group of businesses, environmental groups and statewide and local organizations that have come together to build both public and legislative awareness of the Bio Industry in Wisconsin.
For more information about the Alliance, or to find out how to join, please visit our website: http://www.wisconsinbioindustry.com.
