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Anyone who was paying attention to the news about a Texas trucking company that reaped millions of dollars in Oregon’s green energy tax credits — but actually produced little (if any) environmental benefit — has got to love the “transparency in government act” in the Oregon House.
First, some history: El Paso-based Mesilla Valley Transportation was awarded 752 tax credits worth $4.5 million to equip its truck fleet with the latest fuel-saving technology under Oregon’s Business Energy Tax Credit program.
The trade-off, under the program, is that companies like Mesilla Valley Transportation will use the tax savings to become more eco-friendly.
But upon closer examination, Mesilla Valley Transportation’s trucks were spending less than 1 percent of their miles on Oregon’s highways.
And here’s the rest of the story: While MVT qualified for the credits, it didn’t need them because it didn’t have a tax liability in Oregon. In turn, it sold the credits to another company. MVT profited from the credits, while another company paid less in taxes. Meanwhile, there was virtually no environmental benefit in Oregon.
In short, Oregonians were fleeced out of tax revenue.
What's the big deal?
In the last biennium, the state allowed in the neighborhood of $350 million in tax breaks to businesses on the promise of economic development and environmental protections.
While many — perhaps most — of those businesses work diligently to make good on their promises, there were some (like MVT) that only lined their pockets by shortchanging Oregon’s tax collections.
Had there been a mechanism to more easily track these businesses, MVT may have been caught before the credits were allowed. That would have left those credits available to another company that was serious about job creation and environmental protection.
In today’s climate of a sputtering economy, you can well guess that Oregon is not about to roll back its level of economic development. Instead, you can expect the state to extend even more tax credits to industries as a means of prodding the economy out of the doldrums.
Now more than ever, the state needs a process by which citizens can easily monitor companies that receive tax credits. With more eyes on these companies, it will be more difficult for these companies to fall under the radar.
A good idea
Enter HB 2825, the so-called “transparency in government act.” The bill, with bipartisan support, received a hearing Thursday in the House General Government and Consumer Protections Committee. With some minor grumbling on a few details, the bill generally seems to be gaining traction.
The bill repairs an omission in a 2009 bill that required full disclosure on the state’s transparency website (oregon.gov/transparency) of direct state spending. The 2009 bill stopped short of requiring disclosure of businesses that benefit from indirect spending — such as tax credits.
The sponsors of HB 2825 don’t want this to become another burden on state government — one requiring costly analysis. Instead, they simply want to mandate simple and full disclosure of the companies that receive tax credits and the mandates on those companies for receiving the tax breaks. Those details, which are a matter of public record, would be posted on the transparency website for all to see.
Perhaps then it would be far more likely that businesses like Mesilla Valley Transportation would find it more difficult to wheel and deal under the radar, and Oregonians would stand a better chance of seeing a more committed effort from these businesses on economic development and environmental protections.
The opinions expressed above are those of The Gresham Outlook’s editorial board.
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