Why a tax credit for a money-saving idea?
U.S. Sen. Charles Schumer has proposed a new federal tax credit aimed at encouraging dairy farmers, yogurt manufacturers and cheese makers to build biogas plants to turn their whey waste byproduct into renewable energy.
The New York Democrat’s proposal would allow dairy businesses to receive a tax credit valued at up to 30 percent of the cost of building a biomass-to-biogas system.
Down in the Mohawk Valley, just south of the Adirondack Blue Line, the Johnstown-Gloversville Wastewater Treatment Plant has had such a biogas system for the last several years. It converts whey waste from Fage USA and Euphrates Cheese into electricity. The sewer plant’s biogas system has lowered electricity costs at the plant by more than 90 percent.
The success of our local biogas project should serve as a model for what could be possible in the private sector, but we wonder why taxpapers should have to pay for 30 percent of the private-sector projects.
Companies, and private-sector capital, should recognize the clear logic of building these biogas facilities. With such clear potential for returns, dairy companies should have no trouble financing these projects on their own, and it seems to us that this tax credit would be little more than another example of corporate welfare from Washington.
There’s a bigger lesson here: It shouldn’t be necessary for taxpayers to provide companies with incentives to do what market forces should be telling them is clearly a good idea.