This story was originally published by Inside Climate News and is reproduced here as part of the Climate Desk collaboration.
A letter signed by mayors and local leaders across 39 states is calling on Congress to protect all clean energy tax credits made available to state and local governments, which had been responsible for creating thousands of jobs and billions of dollars in investments before President Donald Trump froze the funds.
Those tax credits and the bill that enabled them—the Inflation Reduction Act, the Biden administration’s signature climate policy—helped launch 750 clean energy projects credited with creating 400,000 new jobs and more than $422 billion in investments. But it drew the ire of the Trump administration. One of Trump’s first acts was signing an executive order pausing further use of the tax credits.
Republican-led states have benefited the most from the credits, and freezing them will hurt communities across the country, the letter sent to congressional leaders in the Senate Finance and House Ways and Means committees late Friday warns.
Repealing the credits would raise Americans’ electric bills by about $489 a year, the letter stated.
“Repeal, rollback, or adjustment of any clean energy incentives will upend countless energy projects and jobs across our country, endangering millions of American jobs, increasing costs for everyday Americans, costing billions in taxpayer dollars, and potentially forcing American jobs overseas,” reads the letter, signed by 133 local leaders representing 25 million Americans across jurisdictions led by both Democrats and Republicans.
The IRA is the nation’s largest single investment in addressing climate change, allocating billions of dollars via grants, loans, and tax incentives to promote the energy transition away from fossil fuels. The bill passed without a single Republican voting for it and has continued to face partisan attacks, though some Republican members of Congress have come to support it as money began flowing into their communities. According to the letter from local leaders, 85 percent of announced investments and 53 percent of new clean energy jobs stemming from the IRA are in districts represented by Republicans.
The 13 tax credits the IRA created for state and local governments have led to the creation of charging stations for electric vehicles, solar installations on government buildings, and more. In just the first year of the tax credits being available, more than 500 local governments have taken advantage of them.
Kate Gallego, Phoenix’s mayor, said the pause in tax credits has created uncertainty for local governments and businesses regarding the status of funding for various projects. In many cases, the credits come in the form of reimbursements for cities, she said. Phoenix has already placed orders for hybrid-electric buses thanks to the incentives and received a $15 million grant for expanding its EV charging network and addressing the city’s air quality problems. The city is trying to find out if that funding will still be available as city leaders work on the budget for the upcoming fiscal year, she said.
Without certainty that the funding will be there, many of the projects can’t move forward. And if the IRA’s tax credits are repealed, it would raise electric bills for Americans across the country by roughly $489 a year as well as cutting jobs, the letter stated.
“Whether you care about helping people manage their energy consumption, or American innovation or energy independence for the United States, the clean energy tax credits and direct pay have advanced those agendas,” said Gallego, who is also chair of Climate Mayors, a network of mayors focused on climate action. Many of the letter’s signees are members.
The tax credits’ uncertain future is one consequence of the Trump administration’s funding freeze across the government, touching off court battles and warnings from experts that the country is in a full-blown constitutional crisis. Federal judges have ruled that the Trump administration cannot pause congressionally approved funds to state and local governments, but agencies are still holding money back.
That led a coalition of 22 Democratic state attorneys general to file a motion to enforce the judges’ rulings and a motion for a preliminary injunction in one of the court cases to stop the funding freeze. On Monday, a federal judge ruled that the Trump administration must immediately restore all frozen federal funding, a win for the states.
“This funding is owed by law to the people of Arizona,” said Arizona Attorney General Kris Mayes in a statement announcing the legal filing. “Trump can try every trick he has up his sleeve to evade the Constitution but I will be there to stop him.”
