Auction To Sell Off Dollars: Some of Oregon’s more divisive tax credit programs have been eliminated. Those business energy tax credits that caused such a scandal and led to the imprisonment of a few people are no longer available. And the bovine poo tax credit program will end in 2022.
As with a holiday cookie stash, the state can’t seem to break its addiction to using tax credits to incentivize behavior or pay for essential services.
On December 5th, The State Of Oregon Will Hold An Auction To Sell Off Dollars, Likely At A Discount
This is how it works: Individuals and businesses in Oregon who owe income taxes to the state can buy tax credits to reduce their overall tax liability. Just like with grocery store coupons, the credits have more worth if they can be used for a discount rather than their face value.
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Past tax credit auctions permitted well-off taxpayers to acquire credits at a great discount, contributing to the polarisation around state tax credit programs. They were essentially buying dollars for 90 or 95 cents, and often much less, shortchanging the state on tax money.
According to a WW article from 2015, there were still energy tax credits available to buyers for 75 cents on the dollar.
However, on December 5 the Higher Education Coordinating Commission will auction off $14 million in tax credits to help fund Oregon Opportunity Grants for deserving students despite the fact that lawmakers have put an end to steep discounts. The HECC will accept minimum bids of $450 for the credits and will sell them in $500 increments.
The agency organizes an annual auction of such credits, and for the past three years, data from the Oregon Department of Revenue show that the credits have sold at a discount to face value.
Certificates sold at HECC auctions typically fetch an average of $550 per $500 face value
The organization provided background information in a statement announcing the sale.
According to the HECC statement, “state financing for the OOG has been insufficient to sustain the college costs of all qualified students.” The Oregon Opportunity Grant “is vital to supporting college affordability for more than 30,000 students each year.”
The Oregon Center for Public Policy and other watchdog groups have been critical of the state’s continued practice of selling tax credits at a discount and the state’s historically wasteful use of tax credits for a long time.
— Global News Report (@robinsnewswire) December 5, 2022
The catch is that it is simpler to hand out credits than it is to reallocate general fund monies from the current budget, as credits incur no immediate costs. However, the state will still have to pay for these essentials in the future, albeit in a less effective manner due to the discount.
Juan Carlos Ordóez, the OCPP’s spokesman, adds that the nonprofit group fully endorses the state investing more money in scholarships, but disagrees with using tax credits to do it.
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According to Ordóez, “the state loses money on each tax credit sold at auction while providing a tax cut to the purchasers of the tax credit, who are likely to be wealthy Oregonians.” “The time has come for the Legislature to forego wasteful funding schemes and instead make direct appropriations to cover basic requirements.”
Detailed information on the auction, which starts on Monday at 9 am and runs through Friday, December 9 at 5 pm, is provided below.
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