It is, of course, disappointing that solar manufacturer XsunX did not qualify for tax credits from the state or Oregon — and that the California-based company won’t immediately proceed with the full-blown plans it had for a solar-component plant in Wood Village.
We cannot argue, however, with the caution exercised by the state Department of Economic and Community Development as it decides whether to award valuable Business Energy Tax Credits to alternative-energy companies. Taxpayers, certainly, will hold the state accountable for its decisions and they expect the state to investigate thoroughly the viability of any company that asks to receive benefits that ultimately will be funded by everyone who pays taxes.
XsunX caused a positive ripple of news when it announced last year that it would move into the facility being vacated by Merix Corp., which closed its Wood Village manufacturing operations. XsunX would have been — and may yet be — the first solar company to land in East County and give a boost to this area’s dream of becoming an industrial hub for solar and other alternative energies.
But while we were among those eagerly anticipating XsunX’s promise of high-quality jobs and investment, we see no evidence the company was treated unfairly by the state process for tax credits.
Under the law approved by the 2008 Legislature establishing a tax-credit program for manufacturers of renewable-energy equipment, companies must meet reasonable standards in order to qualify. Among those requirements are the following:
• The company must show it is in the right business — one that manufactures renewable-energy equipment.
• The company must meet minimum standards for new employment.
• The company must demonstrate financial viability and the likelihood of long-term success.
• And the tax credits must be a major factor in a company’s decision of whether to locate in Oregon.
From what has been disclosed about XsunX’s negotiations with the state, it would appear that it was the question of financing and long-term viability that tripped up the deal.
We have absolutely no inside knowledge of the company’s financial status, but it’s no secret that in the economy of today it is exceedingly difficult for even the most established corporations to find the financing they need to expand, or just to meet normal obligations. The state is correct to be conservative in assessing whether a company that will receive tax assistance also will be a long-term asset to Oregon’s economy.
Our hope is that XsunX still can be a contributor to East County’s future economic success. Company officials say they will return to state officials with a scaled-back proposal to receive tax credits in return for creating new jobs in Wood Village.
This is an important industry for Oregon. The state recognizes that fact, or it wouldn’t have developed the tax-credit program. But, as the XsunX example demonstrates, applying such a program in practice cannot be a simple process if taxpayers’ interests are to be given full consideration.
The Gresham Outlook – http://www.theoutlookonline.com/opinion/story.php?story_id=123673515614771200
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