SALEM Oregon increasingly is described, accurately or not, as the Saudi Arabia of wind energy or wave energy or alternative energy in general. The state also could become the Cayman Islands of green energy-related tax credits. Last year the amount of Business Energy Tax Credits, or BETCs, skyrocketed and a new proposal by businesses and the state will further increase the amount of credits. And that makes critics wince.
Last year, the Legislature raised the maximum tax credit for companies that make green energy investments from $3.5 million to $10 million. The maximum value of projects that qualified for the credit doubled to $20 million.
The latest proposal is a bill widely expected to pass during the special Legislative session. It will double, to $20 million, the tax credits available to renewable-energy manufacturing companies that build facilities here. In all, the state will hand out at least $300 million in energy tax credits over the next five years.
That kind of lost tax revenue has killed other green tax credit proposals, like the one by the Oregon Business Association seeking credits for companies that exceeded environmental standards. It died after the gloomy state revenue forecast in mid Februrary. Proponents, such as the governor and the OBA, argue that credits are a big draw to large companies. An oft-cited example is Hillsboro-transplant SolarWorld Group, a German business that makes solar cells and plans to expand its workforce to 1,000 in the next four years.
Chuck Sheketoff of the Oregon Center for Public Policy wonders if that tax money would be better spent on education or transportation. It’s those things, he says, that attract long-term companies. “We didn’t get Adidas because we had shoe tax credits,” he says.