A guest blog post by Jon Bartholomew of OSPIRG
As Oregon faces a $3.5 billion budget deficit, efforts are underway to give taxpayers a fuller picture of how much state revenue is being used for corporate subsidies. While Oregon provides checkbook-level transparency of direct state spending, it does not provide any detail of spending through the tax code. We can get big picture about each tax subsidy program from our Tax Expenditure Report (TER), but it only tells part of the picture.
Based on what it says in the newest TER, there is likely to be about $600 million in the next biennium in tax breaks for businesses for the purpose of economic development. What you haven’t been able to see in the TER or anywhere online is who got these breaks, how much they got, how many jobs they promised to deliver, and what they actually did. If we are to ensure these programs actually create the jobs they said they would, and to ensure these breaks aren’t going to undeserving businesses, we need to be able to see that data.
One of the largest and most controversial of these tax expenditures that businesses benefit from is the Business Energy Tax Credit (BETC). Just last month, the Oregon Department of Energy began posting who has received and been pre-certified for BETC credits on their website. This information should be mirrored on the state transparency site, but at least it’s available at ODoE’s site. Some improvements that still need to be made are to include the data in a downloadable spreadsheet (instead of a pdf) and to include pass-through partners (where the company that received the credit then sold the credit to another taxpayer). This is the first improvement to transparency of economic development programs in Oregon since Good Jobs First gave Oregon an “F” in their report Show us the Subsidies. The report noted that none of Oregon’s economic development tax subsidies posted data online about who received the benefit and what the taxpayers got for it.
But besides the BETC program, there are hundreds of millions of dollars that go to corporations in the name of economic development that we can’t see online. For the Enterprise Zones, the Strategic Investment Program, E-Commerce Zones, Oregon Investment Advantage and a half dozen other programs, we still need to be able to see who got the money and what they did for it. This is exactly what is behind HB 2825, a bipartisan effort to make economic development tax incentives more transparent to the public. As an editorial in the Eugene Register Guard noted, “Oregonians need a clear picture of what they’re getting from these programs, both because of their big price tag and because it’s essential that the expenditures yield actual results.” This bill had its first hearing on February 17th and has broad bipartisan support.
Transparency is certainly not the silver bullet to ensure the state spends money in the most effective ways, but it is a powerful tool for accountability. Through transparency, active citizens can analyze how we spend, and make suggestions for improvement. The arguments about state spending shift from about rhetoric to about facts. And since sunlight is the best disinfectant, transparency will also prevent the misspending of tax dollars. While there has been a lot of improvement over the last two years, we still need to ensure ALL state spending is transparent, and we need to make it more understandable.
Jon Bartholomew is a Policy Advocate for the Oregon State Public Interest Research Group (OSPIRG). He is a member of the Transparency Oregon Advisory Commission, a board member of Open Oregon, and works on promoting government transparency in Oregon. In addition, he works on consumer protection and democracy issues for OSPIRG. Prior to working for OSPIRG, Jon worked for Common Cause as Associate Director of Media Reform.