June 19, 2007
Oregon
Oregon
With little debate, the Oregon Senate’s tax-writing committee agreed Monday on key elements of a $25 million package of tax breaks for developers of wind farms and biodiesel plants, parents saving for college, filmmakers, builders of energy-efficient homes and a host of others.
They also unveiled a plan to offset most of those tax breaks by raising taxes a bit on wealthy individuals – couples earning more than $234,600 or singles earning more than $156,400.
Collectively, high-income Oregonians would pay about $9 million a year more in state income taxes because their personal tax credits would shrink by as much as $107 for each person claimed on their tax returns.
The Senate Revenue Committee, headed by Ryan Deckert, D-Beaverton, unanimously decided that Oregon should have new or bigger tax breaks to:
Reimburse businesses for half the costs, up to $20 million, to build a wind farm, biofuel plant, co-generation plant or other renewable-energy facility and give home builders a $12,000-per-home credit to build energy-efficient homes with solar power.
Expanding the tax credit for businesses to take energy-saving steps, a credit that already costs $10 million a year, is projected to raise the annual tax break above $18 million a year by 2010.
Subsidize moviemaking in Oregon. The state would offer filmmakers bigger cash rebates – nearly 20 percent of what they spend in Oregon – to lure them from other states that covet the industry. The cost to taxpayers, now $1 million a year, would rise to $5 million a year.
Reward truckers or trucking companies that retrofit their diesel engines to spew less pollution. They would get breaks worth about $2 million a year.
Allow parents saving for college to deduct their contributions, up to $4,000 a year. Doubling the allowed deduction will mean $1.6 million less for state tax collections each year.
Let the children and grandchildren of people who own forestland, farms, farmhouses, fishing boats, fish processing plants and nurseries worth up to $7.5 million inherit the property tax-free. Under current state law, heirs must pay an estate tax to inherit property worth more than $1 million. Only small numbers of farm, forest or fish-based estates worth more than $1 million are passed to heirs in Oregon each year, so the projected cost to the state would be $500,000 a year.
The tax credit bill, which has been amended to grant those and five other tax breaks, will see more added by the committee today before it is sent to the full Senate, then to the House. The bill is expected to bring in $25 million less in taxes collected for the 2007-09 budget. The tax breaks would cost at least an additional $10 million a year in later years.
The change in the estate tax law would be permanent. All of the other tax breaks would expire, typically in 2012, if future Legislatures don’t renew them.
Deckert said he is confident the most expensive of the new tax breaks – to reimburse businesses for half the cost of wind farms, biofuel plants and other renewable energy plants or equipment – “will generate the kinds of projects that will make Oregon a more prosperous place.”
He said raising taxes on high-income Oregonians to pay for tax breaks, primarily for businesses, is “good tax policy.”
Some sought-after breaks aren’t in the bill but could be added, including bigger tax credits for working-poor families, a corporate tax break for software firms that create at least five jobs, and tax breaks for doctors who agree to treat military personnel and their families.
A separate bill designed to deliver $4.4 million worth of tax breaks to those who help produce or use biofuels, already passed by the House, will be considered separately by the Senate panel.
By Betsy Hammond
19 June 2007
URL to article: https://www.wind-watch.org/news/2007/06/19/panel-agrees-on-bounty-of-tax-breaks/