Industry Market Trends
A Struggling Green Manufacturing Sector Causes Oregon to Retool Tax Incentives
May 8, 2013
The Oregonian, the state's largest newspaper, SoloPower shut down its Portland factory on April 21, despite having received a $20 million tax credit from Business Oregon. Another solar company, SolarWorld, is also facing possible layoffs as the German-based company sees its stock plummet. "I think we really need to make changes to our approach because what we were doing had pretty much run its course," said Tim McCabe, the director of Business Oregon. "A large part of our economy is built on green industry, but with the solar and wind industries in a little bit of turmoil, we wanted to address other sectors of manufacturing as well. "We had targeted solar in 2006, and we saw it as a growth industry," McCabe said. "And it's still a viable industry, but we think it needs to sort itself out and see who's standing, and in the meantime we focus on manufacturing as a whole." McCabe added that another reason to expand the manufacturing program beyond solar is that, "quite simply, we haven't had much interest from any new solar companies wanting to come into the state in recent years." Some of the changes to Business Oregon's proposal, called the Oregon Manufacturing Initiative, are:The state of Oregon boasts many great opportunities for manufacturers: Friendly legislation and tax breaks, fairly inexpensive land (compared to other states), and a level of corporate taxes that aren't too burdensome. Oregon's attitude toward business and manufacturers has led to major corporations like Nike, Adidas, and Intel deciding to do business there, along with major solar companies like SolarWorld and SoloPower. But Business Oregon, the economic development agency of the state, feels like it's losing ground to states like California when it comes to attracting businesses, and even though manufacturing accounts for the largest share of the stats' gross domestic product (GDP), the agency is trying to do more. And instead of trying to attract more renewable energy manufacturers, Business Oregon is casting a wider net. It might have something to do with the fact that two major solar companies located in the state are in big trouble; according to
- Extending eligibility to all manufacturers looking to expand or locate in Oregon, not just those in renewable energy.
- Limiting companies to one credit worth as much as $10 million -- instead of two credits that max out at $40 million -- and capping the total amount of tax credits to $100 million every two years, versus the $200 million now.