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Erik Curren: Why the $100 hybrid tax is unfair and bad for business

erik-curren2I never thought of Governor Bob McDonnell as a performing artist until now. But his proposal to raise money for transportation without appearing to raise taxes is a stage act with contortions worthy of Cirque de Soleil.

Many people have commended the governor and general assembly for managing to pass a compromise that has produced Virginia’s first plan on transportation in decades. And it’s true that the state has many unmet needs to fix roads and bridges and build trains.

The funding mechanism is arcane and complex, including replacing the retail gas tax with a less visible tax on fuels at the wholesale level. But as bad as it is to hide the true costs of driving from drivers, I just want to pick a bone with one small but especially bad component of the governor’s funding scheme: the proposed $100 tax on hybrid cars.

Of course, the tax is bad policy for energy and the environment, punishing drivers for saving gas just when the stuff is approaching $4 a gallon and America needs to save gas more than ever. Even the governor himself agrees that green vehicles are good. In October, he announced plans to convert the state’s 15,500 vehicle fleet to other fuels, a plan that he claimed is “good for the taxpayers, primarily; it’s good for the environment, and it’s going to be good for creating new competitive markets in the private sector.”

The fee’s proponents say it’s an issue of fairness. Since alternative fuel vehicles put the same wear and tear on the roads as gas cars but pay less for road upkeep in the form of gas taxes, clean cars are free riders. So, they need to pay extra to make up for it.

In “$100 fee for hybrids fuels criticism of roads plan,” the Times-Dispatch ably refutes this argument and shows that the fee is unfair. 

Even a gas guzzler getting 10 MPG driving 8,000 miles per year would pay only $84 a year in gas tax. An average car getting 25 or 30 MPG could pay $50 or less.

Meanwhile, a Prius owner may get 40 MPG, but still buys gasoline and thus, still pays gas tax. Yet in addition, no matter how little her car uses the roads, that Prius owner would also have to pay an extra flat fee of $100.
Even worse, the hybrid fee will hurt Virginia’s important automobile industry at a time when new car sales are still slow. As Bob Farlow at McGeorge Toyota in Richmond told the Times-Dispatch: “We’re concerned that it may have a negative impact on our business, which may have a negative impact on the economy, which may have a negative impact on jobs.”

I paid a visit to McDonough Toyota to talk about the hybrid tax and heard universal opposition, from owner Steve McDonough on down, to any special tax on hybrids.

What can be done?

The governor still has the ability to veto the hybrid tax when he signs the transportation bill. And he has already said he’ll consider doing that.

Apparently, the governor is hearing an earful. Del. Scott Surovell and Sen. Adam Ebbin have already gotten 5,000 signatures on a petition asking the governor to line-item veto the hybrid tax when he signs the transportation bill:

While citizen signatures will help, local governments are even more credible voices. Fortunately, cities are now also jumping on board. Last week, here in Staunton, my colleagues on City Council agreed to send the governor a letter asking him to veto the tax. Councils in Harrisonburg and Charlottesville are considering doing the same.

Virginia needs to fund transportation, but not by unfairly penalizing drivers who try to do the right thing by saving gas and cutting the state’s demand for foreign oil. Nor should we do it by harming the state’s car dealers, important employers in their communities. Anyone who cares about energy and our natural environment as well as our business environment should oppose this unnecessary and onerous new tax.

Erik Curren is a member of Staunton City Council.

augusta free press
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