Tad DeHaven
July 23, 2013 5:40PM

Feds and the States Tag-Teaming on Corporate Welfare

In a recent op-ed for the Indianapolis Star I discussed the symbiotic relationship between federal and state government when it comes to doling out corporate welfare subsidies. The focus was primarily on Indiana, but the issue is a national concern.

A good example is the $2 billion Shepherd’s Flat wind farm in Oregon that was largely financed with federal and state taxpayer support. Ted Sickinger, a reporter for the Oregonian, has done an excellent job of digging into details behind the project (see here then here then here) and it appears that Shepherd’s Flat was one big taxpayer handout. In fact, the Obama administration signed off on the federal government’s share of the subsidies even though it knew the project didn’t need any support from taxpayers:

In 2010, Shepherd’s Flat attracted national notoriety for its subsidies. In a briefing memo for the President leaked to the media, Obama’s top advisors worried that the U.S. Department of Energy’s loan guarantee program was subsidizing projects that didn’t need it.

Shepherd’s Flat was their case in point.

Treasury Secretary Larry Summers, energy czar Carol Browner, and Vice President Joe Biden’s chief of staff Ron Klain said Shepherd’s Flat was “double-dipping” on $1.2 billion in federal and state subsidies – 65 percent of its projected cost. The incentives included a $500 million federal grant, $200 million in federal and state tax benefits from accelerated depreciation, $220 million in premium power prices attributed to state renewable energy mandates, and a $1 billion loan guarantee with a value of $300 million to the developers.


Tad DeHaven

Tad DeHaven is a budget analyst at the Cato Institute. Previously he was a deputy director of the Indiana Office of Management and Budget. DeHaven also worked as a budget policy advisor to Senators Jeff Sessions (R-AL) and Tom Coburn (R-OK).