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BETCs, Biofuels and
Booddoogles
by Oregon State Senator Doug Whitsett,
8/23/16
Oregonians have endured unending cries from
proponents of big government for more than a
decade, claiming the State must have more
revenue to run its operations. Those
constant pleas, combined with Democrat
dominance of both the House and Senate for
the past dozen years, have resulted in
frequent tax and fee increases levied on
Oregon citizens and businesses.
Proponents of ever-increasing government
spending universally fail to acknowledge
that state government has a spending
addiction. Typically absent from their
discussion is any reference regarding where
the new revenue has been spent and what that
spending has achieved. Also missing is any
narrative regarding the wasting of taxpayer
money on multi-million dollar boondoggles
that should never have been allowed to
happen.
Political leaders have failed to prioritize
programs that provide needed services to
Oregonians. Instead, state officials have
spent literally hundreds of millions of
dollars on attempted social engineering and
“market transformations,” often under the
guise of protecting the environment. Their
explanations are usually devoid of any
accountability for the use of other peoples’
money.
Citizens should ask if we are better off in
the aftermath of all that spending. I have
observed little, if any, improvement in
either the level or quality of services
provided to our residents during my three
terms serving in the Oregon Senate. What I
have observed instead is rampant crony
capitalism, where favored industries and
constituencies receive huge chunks of public
money with little or no accountability for
what that money buys.
In this recent
Oregonian article,
reporter Hillary Borrud highlights several
of these ongoing issues.
Senate
Bill 324,
was signed into law during the 2015
legislative session by newly appointed
Governor Kate Brown. The Act extended the
sunset on the state’s so-called Clean Fuels
program, enabling the controversial agenda
to move forward. The divisive law was passed
on party-line votes with unanimous
opposition from Republicans in both chambers
and Senator Betsy Johnson (D-Scappoose).
Borrud’s article takes a look at where the
Program is about six months after the
enactment of that law. “Oregon has just one
commercial ethanol production plant right
now, despite sinking $51.3 million worth of
various incentives into ethanol projects in
the decade leading up to the new law. The
state also has only one commercial biodiesel
plant, after awarding $6.1 million in
biodiesel production incentives during the
same period.”
The biofuels program under SB 324 promised
those incentives would be used to create
jobs in Oregon because fuel providers would
switch to biofuels in the name of reducing
greenhouse gas emissions (GHG). That promise
was broken. Borrud’s article points out that
much of the ethanol being used in Oregon is
not produced in Oregon. Rather, it is
imported by rail from states such as
Minnesota, Kansas and Nebraska.
An ethanol plant in Boardman received
Business Energy Tax Credits (BETCs) worth
$10 million and originally planned to hire
up to 100 employees. It is our
understanding the plant has produced no
commercial cellulosic ethanol and currently
employs about 15 people. The only Oregon
business currently producing ethanol for
fuel companies is also based in Boardman. It
received $14.6 million in BETCs.
Another plant in Clatskanie obtained nearly
$8 million in BETCs, as well as a $20
million loan. Approximately $18 million of
that loan was written off by the state after
the company filed for bankruptcy. The
Clatskanie facility was converted to a crude
oil transfer facility after the company
filed for bankruptcy. It has since been
retrofitted again to handle ethanol
shipments heading out of state.
Nearly $750,000 in BETCs were given to a
company in Cornelius that has not produced
any biofuels for the people of Oregon. An
official from the Department of
Environmental Quality (DEQ) is quoted in
Borrud’s article stating that despite all
the incentives, the company produces only
small quantities of ethanol. She went on to
say that DEQ is now expecting much of the
state’s alternative fuels to come from
landfill and other waste gases instead of
biofuels.
The Clean Fuels program has essentially
provided nearly $60 million in "venture
capital” using taxpayer money. Apparently,
private sector venture capitalists wouldn’t
touch these “investments.”
Moreover,
according to DEQ
figures,
the Clean Fuels program will impose hidden
taxes up to 19 cents per gallon of motor
fuel. All of that revenue will flow to out
of state and international green energy
companies. None will be used to maintain and
improve Oregon streets and highways.
Finally, the Clean Fuel program was promoted
as a means to reduce GHG. To date, DEQ has
been unable to provide objective,
statistically significant data demonstrating
the program will produce any significant
reduction in GHG emissions.
By any objective measure, the Clean Fuel
program is destined to be a complete
failure.
State government’s
insatiable appetite for spending other
peoples’ money is embodied in what promises
to be a very expensive and divisive campaign
for
Measure 97.
It will levy a new tax on businesses that is
expected to raise around $6 billion per
biennium if passed by voters this November.
Much of the rhetoric
surrounding Measure 97 is the same that was
used to promote
Measures 66 and 67.
In that 2009 campaign, the supporters
maligned companies that create jobs and
opportunities for Oregon for supposedly not
paying their “fair share” in taxes. Voters
approved both measures in a special election
held in January 2010.
But even though
Oregonians gave proponents of those measures
the benefit of the doubt by voting for them,
state government services did not improve.
The state instead posted the
nation's lowest high
school graduation rate,
has seen
alleged widespread
abuse of children in its foster care system
and
has settled multiple
whistleblower lawsuits.
Proponents of Measure
97 are falsely claiming the money it would
raise must be spent for funding public
education, health care and services for
senior citizens. However, short of a
constitutional amendment, it is not possible
to bind how future legislatures spend
General Fund money. This
has been verified
by Legislative Counsel, the attorneys who
draft all of the bills and provide
legislators with legal opinions.
The Democratic
co-chairs of the budget-writing Ways and
Means Committee
have also gone on the
record
verifying the Legislature will be free to
spend Measure 97 money however it wants. One
co-chair acknowledged that some of it could,
indeed, be used to offset some of the $885
million in projected increases of the
state’s Public Employee Retirement System.
Another salient fact
is never mentioned by supporters of the
Measure. According to the non-partisan
Legislative Revenue Office, state tax
collections
have been and remain
at historical highs.
Even without Measure 97 revenue, Oregon
government has never before had so much
money to spend.
The Taxpayers
Association of Oregon recently determined
that
Oregon is the number
one tax-and-spend state
in the Western United States. The state and
local governments here spend more per capita
than our neighbors and 39 other states. When
that level of government spending is divided
by population, Oregon spends over $8,000 per
resident. That is nearly double what is
spent in Utah, and well above what is spent
in Washington and California.
Backers of the measure
have even tried
strong-arming
economists they hired to analyze the
measure. They apparently wanted the
economist to distort what the Measure
actually will and will not do. The editorial
board of the Bend Bulletin newspaper
was among those
objecting
to those tactics.
Other tactics
allegedly employed by proponents have
resulted in a
complaint being filed
with the state’s elections division. If
verified and upheld by the courts, the
election law violation complaints could
result in felony charges.
Despite all of the
seeming dishonesty and underhanded tactics
surrounding it, state officials are
refusing to change
the voter pamphlet statement submitted in
support of the Measure.
Legislation was
proposed in the 2015 session that would have
required information
in a voters pamphlet statement to be true.
That bill was defeated on party-line votes
in both the Senate
and the House.
Oregon voters are once again being asked to
support higher taxes to fund state
government programs. Governor Kate Brown has
endorsed Measure 97 and is already planning
how to spend the $6 billion in new revenue.
Majority Democrats would better serve the
public by working to reduce out of control
state spending before asking the people of
this state to fill government coffers with
additional dollars.
Please remember--if we do not stand up for
rural Oregon, no one will.
Best Regards,
Doug
Senate District 28
Email:
Sen.DougWhitsett@state.or.us
I Phone: 503-986-1728
Address: 900 Court St NE, S-311, Salem, OR
97301
Website:
http://www.oregonlegislature.gov/whitsett |
