Oregon taxpayers are shelling out tens of millions of dollars to subsidize green energy projects, making the state a magnet for solar and wind companies.
But an investigation by The Oregonian shows that the money also is going to risky ventures with questionable environmental benefits and to prosperous companies that need no incentives but are cashing in anyway.
When the Legislature convenes next week, Gov. Ted Kulongoski will call on lawmakers to raise taxes and fees as the state plunges deeper into recession.
At the same time, he will push to expand tax breaks for businesses — tax breaks that will cost the state at least $140 million over the next two years, a cost he says is necessary to make Oregon a sustainability model for the nation.
The governor likes to credit these subsidies for luring SolarWorld to develop a $440 million factory in Hillsboro. But records show that the state also has given away millions to keep long-haul truckers comfortable in their cabs overnight without running their diesel engines, to timber companies for wood-burning steam boilers, to buy bus passes for well-paid employees at Nike and the city of Portland, to build a state-of-the-art bicycle garage for a Hillsboro sportswear company and to help a car rental company add hybrids to its Portland fleet.
The handouts come from Oregon’s Business Energy Tax Credit program — the state’s fastest growing tax shelter. The credits are so easy to obtain that more than 4,000 applicants have lined up to get them whether they need them or not. Klondike Wind Farms, for example, seeks $44 million in state tax breaks even though eastern Oregon’s wind-blown geography has proved a profitable turbine location, subsidies or no.
“It’s gotten out of hand,” says Chuck Sheketoff, director of the Oregon Center for Public Policy, which studies the impact of state tax policies on low-income residents. “It’s being scammed. It’s not serving its purpose.”
Even banks and big corporations that have nothing to do with renewable energy are grabbing the tax breaks. Under the state’s generous incentives, groups and companies that qualify for tax credits can turn around and sell them. Most do. Standard Insurance, for example, paid $2.5 million to Flakeboard, an Albany mill that makes composite wood. In exchange, Standard gets to use $3.5 million in tax credits the mill received for building a wood-burning boiler that can generate electricity.