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Oregon lawmakers tried to save millions of taxpayer dollars by trimming state subsidies enjoyed by wind energy farms, but Gov. Ted Kulongoski said today he plans to veto that effort.
In doing so, the governor signaled he has little tolerance for any retreat on his vision for the state as a national center for alternative energy -- recession or no.
"A rollback in these tax credits would be detrimental to Oregon's continued success in creating green jobs and new green technology in the state," the governor's office wrote in a news release announcing his veto intent.
Kulongoski also said he is considering a veto of another bill that would have allowed older biomass energy plants to contribute to the state's goal of generating 25 percent of its power from renewable sources by 2025.
Sen. Ginny Burdick, D-Portland, who led the effort to rein in wind farm tax credits, said she shares the governor's commitment to building green energy in Oregon. However, she said, the tax breaks go too far and cost too much.
"At a time when families are sitting around the kitchen table telling their children they can't go to college because of tuition increases, is it really fair to take what amounts to a corporate subsidy and double it?" Burdick said.
The subsidies to wind farms are part of a program called the Business Energy Tax Credit. Anyone who builds a project that creates renewable energy qualifies for a tax credit worth half of the construction cost, up to a maximum of $10 million for wind farms.
Over the past two years, the tax givebacks cost the state about $60 million. Over the next two years, the cost to the state is expected to rise to at least $144 million, according to the most recent estimates.
Burdick successfully pushed for Senate Bill 2472, which cut the maximum tax credit for large wind farms down to $3.5 million. The reductions would save the state an estimated $10 million a year.
"If the governor decides to veto it, it will blow a $20 million hole in the budget," which covers two years, Burdick said. That could be further cuts to education, which makes up more than half of state spending, she said.
A spokeswoman for Kulongoski said he plans to take the money from the state's ending balance so it won't affect spending on schools. "It's a minimal amount when you look at the return on investment," said Anna Richter Taylor.
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