So many businesses are getting tax subsidies under Oregon's effort to promote alternative energy that the state now estimates it will spend $167 million on them in 2009-11, up from $68 million it gave out in similar tax breaks in 2007-09.

The higher spending demonstrates the increasing popularity of Oregon's Business Energy Tax Credit. But it comes at time when other state programs face cutbacks, and that's giving some lawmakers heartburn.

"What this does is create a real dilemma," said Sen. Ginny Burdick, D-Portland. The state's two-year budget, approved last June, will now come up short by as much as $50 million.

"The money will have to come from somewhere," Burdick said, "and the only places it can come from is education, public safety and human services. I don't think it's acceptable to subsidize wind farms at the expense of education."

Under Burdick's direction, the Legislature tried to curb the giveaways by reducing subsidies for wind energy companies that set up turbines in Oregon. Burdick and others say wind power in particular has become profitable enough that companies don't need state financial help.

But Gov. Kulongoski vetoed that bill earlier this month because he's a firm believer that the tax credits have helped make Oregon a center for renewable energy, and he wants the state to continue propping up the industry until it can stand on its own.

Kulongoski's spokeswoman, Anna Richter Taylor, said the governor has asked the Department of Energy, which oversees the tax credits, to develop stricter rules for who gets them. That could reduce the cost to the state, Taylor said.

"There needs to be more accountability and criteria -- the governor agrees with that," Taylor said. The governor also supports a bill passed by the Legislature that requires the state to analyze the wind farm industry.

"Let's look at the program first and evaluate whether the industry can stand on its own and thrive, or whether this incentive is necessary for them to be competitive before we cut the program," she said.

The new estimates were developed by the Legislative revenue staff, which used more up-to-date tax data to determine that the incentive would cost the state a good deal more than originally projected.

Earlier in the year, the tax credits were expected to cost $144 million. The bill vetoed by Kulongoski would have cut that to about $120 million -- mostly in lower subsidies for wind farms. The latest estimates mean lawmakers may have to cut the state budget by $47 million when they meet in special session in February.