Would the average Georgian support a taxpayer-funded program that provides a nearly free car to a narrow group of mostly in-town citizens? Most Georgians would be shocked to learn such a program exists: the state alternative fuel tax credit, passed in 1998.
This month, I will introduce legislation to revise, reduce and provide for a phased elimination of this credit. Last year’s bill passed the House twice but failed in the Senate. In 2015, this peculiar credit will cost the state approximately $50 million, based on the number of cars purchased in 2014. Over the next 20 years, the state is predicted provide over $1 billion to the recipients of this credit.
Who are the recipients of this credit? Approximately 18,000 to 20,000 in number by the end of 2014, they largely lease a Nissan Leaf. Other hybrids such as the Toyota Prius Plug-in Hybrid and the Chevy Volt are excluded, even though data compiled by the U.S. Department of Energy shows the Toyota actually produces fewer pounds of CO2 emissions each year, and the Chevy is comparable to the Leaf.
How lucrative is the credit to its recipients? Multiple articles, testimonials and even advertisements from local dealers point out that a person can drive a Nissan Leaf on a 2-year lease for “almost nothing” after applying a $7,500 federal credit and taking a $5,000 state credit.
Savvy Leaf drivers can simply turn their old vehicles in at the end of that lease and repeat the process — leading potentially to years of cost free, state-subsidized driving. And while the related federal subsidy is set to eventually phase out, this gift from the Georgia taxpayer goes on and on forever, if nothing is done. And lastly, such drivers also get an indirect subsidy from all other drivers. Since a Leaf driver buys no fuel at all, all road maintenance is paid for by the rest of us through the gas tax.
The state is already grappling with shrinking gasoline tax collections because increasingly fuel-efficient cars pay less taxes per miles driven. Redirecting the alternate fuel tax credit — or as some call it, the “Leaf” tax credit — to pay for 20-year bonds in the state budget would fund more than a half-billion dollars in road and bridge improvements statewide.
Whether you favor subsidies for a broader group of low-CO2 vehicles or oppose such subsidies entirely, the current credit in Georgia needs to change. Is it really good state policy to pay $50 million per year to let a select group of 10,000 or more individuals drive a particular type of car for free or almost free?
State Rep. Chuck Martin is a Republican from Alpharetta.
