Articles filed under Taxes & Subsidies from Oregon
So just how much does a wind farm job cost taxpayers? The answer depends on the formula, and involves an implicit assumption that the jobs wouldn't exist without the subsidy -- questionable in the case of Oregon's large wind farms. Either way, the simplest formula for Shepherds Flat, with $1.2 billion in subsidies for 35 permanent jobs, that equation delivers a cost per job of $34 million.
A host of reforms aimed at reining in Oregon's budget-busting subsidies for green energy projects were signed into law Thursday by Gov. Ted Kulongoski. ...The new rules phase out tax incentives for big wind farms, give the state greater authority to reject applications from suspect companies and set caps on the amount the state can spend to attract renewable energy projects and manufacturing plants.
The House gave final legislative approval on a 58-0 vote Tuesday. The Senate passed it Monday. House Bill 3680 was prompted by the growth in projects, particularly large wind-generating projects, spurred by an expanded business energy tax credit in 2007. The credits, which businesses subtract directly from state taxes owed, threatened to exceed budgeted estimates by $100 million or more in the current two-year cycle.
Oregon's Business Energy Tax Credit (BETC) allows businesses without ties to green energy buy credits at a discount and reduce their state income tax bills. There is a problem with the BETC. As Treehugger.com put it, Walmart "raked in $11 million by taking advantage of it-without ever touching a solar panel or a wind turbine."
Oregon's generous incentives for renewable energy have helped make it a national contender in the competitive world of wind energy development, despite the fact it only has mediocre wind resources. Now comes the test of whether the nascent green energy industry is ready to stand on its own in Oregon while other states try to pull away projects.
As much as we tout the importance of government support for the fledgling renewable energy industries like wind and solar, recent revelations in Oregon point out how these can get out of hand, and become a mess, fast.
Thanks to the Enron scandal, most of the great titles -- "Conspiracy of Fools" comes to mind -- for the tell-all book about the BETC debacle already have been hijacked. But while we await the final verdict on these massively inefficient tax breaks, the preliminary conclusions are clear: No one is particularly sorry. No one is responsible. And no one is taking the fall.
Big wind energy projects no longer need state incentives, Gov. Ted Kulongoski said today, as lawmakers explored a plan to rein in the soaring costs of Oregon's tax breaks for green energy. At a meeting with newspaper editors from across the state, Kulongoski said the $11 million in state tax credits routinely given to 10 megawatt-plus wind farms has "run its course."
When Oregon started handing out jumbo tax subsidies for renewable energy projects two years ago, one of the biggest beneficiaries was also one of the world's richest corporations -- Walmart. No, the retail giant hasn't branched to solar panels or wind turbines. Instead, Walmart took advantage of a provision in Oregon's Business Energy Tax Credit that allows third parties with no ties to the green power industry to buy the credits at a discount and reduce their state income tax bills.
The governor offered his support for a proposal to phase out the incentives given to wind energy projects, worth up to $11 million each. The proposal is part of a set of changes recommended by state energy and economic development officials for the Business Energy Tax Credit, considered the most lucrative incentive of its kind in the nation. ..."What he's determined is, this industry has matured and doesn't need as large of a subsidy," she said.
When Gov. Ted Kulongoski vetoed a bill this summer that would have slashed Oregon's tax subsidies for large wind farms, he insisted the reduction went too far and would jeopardize the growth of Oregon's green economy. But during the past eight years ...it has yet to do any substantive analysis of how big a subsidy is necessary -- if any -- to continue attracting investments. ...Sen. Ginny Burdick, D-Portland, a sponsor of the original bill, says she has no problem with the basic strategy of providing incentives. ..."But we're greatly oversubsidizing these things and the benefits are flowing to California ratepayers," she said. "I don't think that's what Oregon taxpayers signed up for."
Gov. Ted Kulongoski ordered a hurry-up review Tuesday of Oregon's incentives for renewable energy companies in the face of ongoing criticism of the tax breaks. ...The governor's request comes on the heels of an investigation by The Oregonian that revealed state officials downplayed the estimated cost of the incentives before they were expanded by the 2007 Legislature at Kulongoski's urging.
State officials deliberately underestimated the cost of Gov. Ted Kulongoski's plan to lure green energy companies to Oregon with big taxpayer subsidies, resulting in a program that cost 40 times more than unsuspecting lawmakers were told, an investigation by The Oregonian shows. Records also show that the program, a favorite of Kulongoski's known as the Business Energy Tax Credit, has given millions of dollars to failed companies while voters are being asked to raise income taxes because the state budget doesn't have enough to pay for schools and other programs.
When three Eastern Oregon wind farms got big federal grants last week, the news brought a debate that has been simmering at the state level to a boil. Because wind farms are expensive, wind power company officials say, they need all the help they can get. But some say the recent grants serve as a high-profile reminder that Oregon doesn't need to spend more to woo wind farms. "Oregon is far more generous than other states," in terms of renewable energy credits, said Jody Wiser, chairwoman of Tax Fairness Oregon. "And it's not driving more building in Oregon; it's just giving money away."
HB2472 would lower the maximum state payments to large wind projects from $10 million to $3.5 million -- shaving only about $20 million from the rapid growth of the subsidies. That made sense when the Legislature approved the bill, and it makes even more now that the program is expected to grow by nearly $100 million ...one of the first orders of business should be to override the governor's veto of HB2472, and reduce the unnecessarily large tax subsidies of some energy projects in Oregon.
So many businesses are getting tax subsidies under Oregon's effort to promote alternative energy that the state now estimates it will spend $167 million on them in 2009-11, up from $68 million it gave out in similar tax breaks in 2007-09. The higher spending demonstrates the increasing popularity of Oregon's Business Energy Tax Credit. But it comes at time when other state programs face cutbacks, and that's giving some lawmakers heartburn.
Tax credits are essentially subsidies, and subsidies should generally be temporary. In the field of renewable energy, subsidies should be offered just long enough to encourage the emergence of technologies and economies of scale that allow new energy sources to compete without public assistance. They should never be so large or long-lived that they amount to a giveaway, promoting the development of projects that would have been completed without tax credits.
Oregon lawmakers tried to save millions of taxpayer dollars by trimming state subsidies enjoyed by wind energy farms, but Gov. Ted Kulongoski said today he plans to veto that effort. In doing so, the governor signaled he has little tolerance for any retreat on his vision for the state as a national center for alternative energy -- recession or no. ...Sen. Ginny Burdick, D-Portland, who led the effort to rein in wind farm tax credits, said ...the tax breaks go too far and cost too much.
Putting up towers and turbines, building roads between them and hooking them to the power grid can be expensive. Offering a little leeway on the front end in the form of tax relief - up to about $10 million until recently - has helped Oregon bring in the farms during the past decade.
In the waning, let's-make-a-deal days of the 2009 Oregon Legislature, clean-energy advocates, utilities and industry trade groups have been wrangling over three bills that could significantly modify renewable energy legislation implemented just two years ago.