A new report out of Oregon alleges fraud and intentional deception on the part of state officials in their rush to use taxpayer money to lure green jobs to Oregon. The Oregonian reports that state officials deliberately underestimated the cost of tax payer subsidies for green energy projects, resulting in a cost 40 times greater than estimates provided to Oregon lawmakers before they voted on the tax breaks. Findings include:

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  • Agency officials estimated in 2006 that expanding tax credits would cost taxpayers an additional $13 million for the next two budget years. However, when energy officials handed their final estimate to the Legislature, the cost was mysteriously reduced to $1.2 million for the first two years of the program. The actual cost turned out to be $40 million, and the lost revenue is now projected to balloon to $243 million for the 2011 to 2013 budget years.
  • A wind energy project received four separate $10 million tax credits even though it will generate less electricity than projects getting one-tenth of the subsidy.
  • An ethanol plant took $12 million in subsidies and a $20 million state energy loan before going bankrupt.
  • A tire recycling plant received $3.4 million, but has yet to recycle a tire after two years.

The outcome of the Oregon experience with lavish green tax credits is predictable. When government hands out taxpayer money, there will always be plenty of hands outstretched ready to benefit from government generosity. The fault lies not with companies but with lawmakers who are gullible enough to believe government-generated cost estimates, bringing to mind the adage, "figures don't lie but liars figure."

Michigan's elected officials may find the Oregon experience a teachable moment. Government intervention into markets with subsidies and mandates invariably leads to large cost overruns and huge inefficiencies. Michigan's declining economy simply cannot afford costly mistakes by politicians eager to further a particular policy or placate a special interest group.

Those who profess to be most interested in a sustainable energy future are often guilty of promoting taxpayer-funded programs that are not sustainable. When government money runs out, so too do the programs. The net result is that we are all left poorer. Elected officials would be wise to look at Oregon rather than believe the optimistic predictions of government bureaucrats or special interest groups.