Deceptiveness is an admirable quality in a baseball pitcher, but not in a political leader. When Gov. Ted Kulongoski sold his green energy tax credit plan to the legislature, he threw a sinking fastball that any major-leaguer would be proud of.The tax credit, officially known as the Business Energy Tax Credit, is the core of Kulongoski's campaign to transform Oregon into the green energy capital of America, and in the process to create lots of jobs. To accomplish that, it offers tax credits to developers of projects such as wind farms and solar energy installations.
So far, so good. But in 2006, when Kulongoski asked for a huge increase in the tax breaks, the deal began to take on a peculiar odor.
As revealed by an investigation by The Oregonian, state Department of Energy officials originally estimated the additional cost of the expanded tax credits at $13 million in the 2007-'09 biennium.
But then the department's number-crunchers sharpened their pencils and got to work. In the final figures submitted to the legislature, they pegged the cost at a mere $1.2 million for the first biennium - less than 10% of the original number - and $4.1 million for the following biennium.
Kulongoski staffers, according to The Oregonian's story, denied there was any pressure on the energy department to lowball the estimate, insisting the final numbers were just a "bad guess." But present and former department officials told a different story. Dave Barker, an analyst who's still with the agency, said he was told by his superiors to cut down the numbers. "What I would hear pretty consistently was, 'We want to keep it conservative,'" Barker said.
The deception would be less hard to take if the state had gotten good value for its money - but in too many cases it didn't.
Restrictions on who qualified for the credits were so loose that the state passed them out like Halloween candy. Since the credits first went into effect in 1979, 97% of applications have been approved.
Some of them were for real lemons, like the tire recycling plant in Boardman that got a $3.5 million credit and, after two years, has not recycled a single tire. Or the ethanol plant in Clatskanie that promptly went bankrupt after receiving $12 million in tax credits plus a $20 million state loan. Or Oregon Windfarms, a project in Eastern Oregon that got $40 million in tax credits although it will produce less energy than another project that got less than one-tenth as much.
The bottom line is that the Business Energy Tax Credit cost the state $68 million in lost revenue in 2007-'09 and is estimated to cost $167 million in the current biennium and $243 million in the following one.
State legislators and Department of Energy officials say they understand the problem now and are going to put the brakes on. We sure hope so. In the meantime, we're going to put THE BOOT on Kulongoski's posterior for sneakily slipping one over on the legislator and the citizens.