Bill would unplug Ga.’s electric-car tax credit

» RELATED: Gas-tax bill goes to full House Thursday

Keith Deininger and his wife take pride in their high-achieving twins.

After all, “Cosmo” and “Mojito” — identical 2013 all-electric Nissan LEAFs — make a fetching pair parked side-by-side in the carport of their northeast Atlanta home. They are cheap to charge, fun to drive and easy on the environment, Deininger said.

“The cost of operation is next to nothing,” Deininger said. For anyone living in a metropolitan area, driving one is a “no brainer.”

But electric vehicle owners and lessees like Deininger could soon be in for a shock.

A proposal under consideration in Georgia would eliminate a popular $5,000 state tax credit for electric vehicles or $2,500 for low-emission vehicles. At the same time, it would slap a $200 annual registration fee on hybrid and zero-emissions vehicles ($300 for commercial).

If HB 170 passes, Georgia would join a growing number of states imposing new fees on green vehicles.

Georgia lawmakers are intent on finding new money for the state’s underfunded transportation system this legislative session. The state Department of Transportation estimates that a minimum of $1 billion to $1.5 billion a year is needed to address a $74 billion shortfall in funding over the next two decades.

The bill’s sponsors say that green vehicle owners ought to shoulder their share of that burden. They cause wear and tear on the state’s roads and bridges just as other drivers do without paying the gasoline taxes that generate the bulk of transportation funding in Georgia.

About 16,000 cars and light-duty trucks registered in Georgia are powered by electricity, natural gas or propane.

Nixing the tax credit and adding an annual registration fee would generate a combined $68 million of new revenue in fiscal year 2016, according to the state Department of Audits and Accounts. That amount is expected to more than triple by 2020 as plug-in vehicles gain popularity.

Supporters of the tax credit, however, believe that taking it away would reduce economic production and growth in Georgia by $107 million over five years.

Tax incentives questioned

State Rep. Jay Roberts, R-Ocilla, introduced the transportation funding bill and is advancing it on behalf of House leadership. From his standpoint, EV owners have little to complain about.

They can drive in HOV lanes and use the I-85 HOT lane without paying a toll. And they are still eligible for a federal income tax credit of up to $7,500.

“We’re looking at long-term, and $200 is not that much to ask,” Roberts said. “Especially when they have received a $12,500 tax credit (by combining state and federal tax incentives). You could go out and lease a car right now and practically pay nothing.”

Georgia has one of the most generous tax credits for electric vehicles in the nation, and it applies not only to buyers but to lessees. By comparison, Maryland and Louisiana offer a credit of up to $3,000 and Utah up to $1,500. All three states limit the tax credits to vehicle purchases.

Electric vehicles tend to be more popular in states that have more incentives, according to the National Conference of State Legislatures. Atlanta was the top market in the nation last year for the Nissan Leaf, the nation’s No. 1 plug-in electric car, in large part due to the generous state tax incentive.

“Instead of punishing Georgians who choose to drive more efficient and sustainable vehicles, legislators should adopt an equitable policy that is in line with those in other states,” said Brionte McCorkle, the Sierra Club’s Georgia Chapter Transportation Organizer.

Just how environmentally friendly electric cars are is a matter of some debate. Whether they are an improvement over a hybrid or even a fuel-efficient car depends on which state you live in and how much that state relies on fossil fuels such as coal and natural gas to generate electricity.

According to the Union of Concerned Scientists, 60 percent of American’s now live in regions where an EV produces fewer global warming emissions than even the most efficient gasoline-hybrid vehicle.

In areas like Georgia, where electricity is produced using a combination of coal and clean energy, the manufacture and use of electric cars generates pollution equivalent to gasoline-powered cars that get 41 and 50 miles per gallon. The average vehicle in the United States gets 24 mpg.

A fight over fees

Deininger estimates that he and his wife, Carol Jensen, have spent a combined $300 to power their vehicles over the past 14 months. They would have paid about $4,900 to fuel their old gasoline-powered vehicles. A lot of the money they saved on fuel was poured back into the state economy with local purchases instead of out-of-state oil companies, Deininger said.

Many EV owners are willing to pay an annual registration fee, but they think $200 is unfairly high, said Don Francis, coordinator for Clean Cities-Georgia.

The owner of an average gasoline-powered car — one that gets 24 mpg and travels 16,000 miles a year — pays about half that ($108 a year) in state motor fuel taxes dedicated to transportation, according to the Georgia Department of Transportation.

Five other states charge an annual registration fee on electric vehicles that ranges from $50 to $100. Washington is considering raising its fee to $200.

At least two states sparked an enormous backlash after imposing a tax on alternative-fuel vehicles. Hybrid-car owners raised a ruckus in 2001 after the Oregon legislature doubled a registration fee for such cars. The Legislature repealed that law in 2003. A similar tide of resentment caused Virginia lawmakers to repeal a hybrid vehicle tax last year.

EV fan groups and environmental organizations have thrown their support behind a compromise bill sponsored by Rep. Ben Harbin, R-Evans.

The bill (HB 220) would lower rather than kill the zero-emission vehicle tax credit. It would also extend the incentive to plug-in hybrids like the Chevrolet Volt and Ford Energi, set an annual cap of $30 million and sunset the tax credit by 2019.

The AJC’s Legislative Navigator gives the bill a 20 percent chance of passing. By comparison, HB 170, the transportation funding bill, has a 45 percent chance of success.

Support real journalism. Support local journalism. Subscribe to The Atlanta Journal-Constitution today. See offers.

Your subscription to the Atlanta Journal-Constitution funds in-depth reporting and investigations that keep you informed. Thank you for supporting real journalism.

X