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The Guv: Give 'em a tax break

Parents saving for college, mobile home owners facing eviction, and businesses that generate or use alternative energy are among the beneficiaries of a wide-ranging tax break bill signed by Gov. Ted Kulongoski on Tuesday......The energy initiative, which ranks as the biggest tax break in the bill, will expand the credit for businesses to build wind farms, use solar or otherwise boost the use of clean energy. Now the credit is 35 percent of costs, with a cap of $3.5 million. The new law increases the credit to 50 percent, with a $10 million cap. It's estimated to cost the state at least $6 million a year by 2009-11.

Parents saving for college, mobile home owners facing eviction, and businesses that generate or use alternative energy are among the beneficiaries of a wide-ranging tax break bill signed by Gov. Ted Kulongoski on Tuesday.

In his bill-signing remarks, Kulongoski singled out a provision meant to spur more doctors to treat veterans and active military members, calling the issue "very, very dear to me." Under the new law, physicians can claim a $2,500 tax credit the first year they accept patients under the federal Tricare health system and $1,000 for each following year.

"This bill makes it easier for physicians and other health care providers to do what they really want to do," he said, "and that is to provide health care for our veterans and military families."

In all, the legislation adds or expands about a dozen tax breaks totaling $22 million in the current two-year budget, and $45 million in 2009-11. While Democrats in control of the Legislature this session had promised to hold the line on tax giveaways -- which decrease the amount of money available for schools and other state programs -- they defended this package as fiscally responsible and helpful to average... more [truncated due to possible copyright]  

Parents saving for college, mobile home owners facing eviction, and businesses that generate or use alternative energy are among the beneficiaries of a wide-ranging tax break bill signed by Gov. Ted Kulongoski on Tuesday.

In his bill-signing remarks, Kulongoski singled out a provision meant to spur more doctors to treat veterans and active military members, calling the issue "very, very dear to me." Under the new law, physicians can claim a $2,500 tax credit the first year they accept patients under the federal Tricare health system and $1,000 for each following year.

"This bill makes it easier for physicians and other health care providers to do what they really want to do," he said, "and that is to provide health care for our veterans and military families."

In all, the legislation adds or expands about a dozen tax breaks totaling $22 million in the current two-year budget, and $45 million in 2009-11. While Democrats in control of the Legislature this session had promised to hold the line on tax giveaways -- which decrease the amount of money available for schools and other state programs -- they defended this package as fiscally responsible and helpful to average Oregonians.

Senate Revenue Chairman Ryan Deckert, D-Beaverton, said they made sure the package didn't hit the state budget too hard. They offset the giveaways in part by raising income taxes paid by wealthy Oregonians: Couples earning more than $234,000 and individuals earning more than $159,000 will pay as much as $110 more for each person they claim on their state taxes.

More importantly, Deckert said, initiatives such as the renewable energy tax credit will launch several pending construction projects east of the Cascades. "Now, it pencils out for them," he said.

The energy initiative, which ranks as the biggest tax break in the bill, will expand the credit for businesses to build wind farms, use solar or otherwise boost the use of clean energy. Now the credit is 35 percent of costs, with a cap of $3.5 million. The new law increases the credit to 50 percent, with a $10 million cap. It's estimated to cost the state at least $6 million a year by 2009-11.

The No. 2 tax break is a 20 percent subsidy for film making in Oregon. It will cost $3 million to $5 million a year and is the only tax break paid in cash to companies -- even if they pay no state taxes.

To compare, the tax break for doctors will cost the state about $3 million a year in 2009-11.

The bounty of tax breaks also includes:

Credit to retrofit older diesel truck engines so they don't clog the air with pollution. Expected to cost the state between $1 million and $2 million a year.

Doubling the break for couples who sock away $4,000 into Oregon's college savings program for a child or grandchild, from $180 to $360. Total cost to state: at least $1 million a year.

An exclusion for farms, nurseries and commercial fishing property in evaluating the inheritance tax. Cost: about $500,000 a year.

A $5,000 break for mobile home owners who need to move because their park is closing. Cost: $1 million a year.

An expansion of the residential energy tax credit so homeowners get a break for installing more than one item -- solar water heater, solar electric system -- a year. Cost: about $1.5 million a year.

Legislators overwhelmingly endorsed the bill, although a few disapproved. House Minority Leader Wayne Scott, R-Canby, thought the breaks should have been bigger, said spokesman Nick Smith.

And the package earned mixed reviews on its claims that it benefits regular Oregonians.

Mike Leachman, an analyst with the Oregon Center for Public Policy, a think tank that advocates for poor and middle-class Oregonians, gave it a thumbs up for expanding tax credits for affordable housing and mobile home owners.

But he questioned whether giving money to lure film makers really helps Oregon's economy. And he wondered whether giving Oregon parents who have the luxury of putting $4,000 in a savings plan that's already tax-free is the best way to help Oregonians struggling with high tuition.

It also seemed funny to him to be giving help to doctors.

"Subsidizing doctors to provide health care to military families does feel like paying for patriotism," he said.

Michelle Cole of The Oregonian staff contributed to this report Janie Har: 503-221-8213; janiehar@news.oregonian.com

 



Source: http://www.oregonlive.com/p...

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