”Our budgets are strong. We are able to do what we need to do. Alabama is at work, we are working, and it’s working,” said Governor Kay Ivey on the campaign trail.
Fast-forward six months: Governor Ivey has proposed a tax increase of 10 cents per gallon of gas. Also included in the legislation is a $250 yearly tax on electric vehicles and a $125 yearly tax on hybrids, all to increase over time.
I had not planned to write about the gas tax. I had anticipated it was going to be something I would reluctantly support. That is until I received a copy of it Friday and realized it was much more than just a tax on gas. And that it would fund more than just roads and bridges.
The plan is to call the legislature into special session this week so opponents of the bill won’t have the opportunity to make their case against it. A special session combined with the fact that 40 members of the supermajority Republican legislature are freshmen will make for a chaotic start to the 2019 legislative session.
Proponents have been unsuccessful in passing a gas tax the past couple of years because they feared defeat at the ballot box when they ran for re-election. But now with dozens of new faces in the legislature and four years for the voters to forget, they feel the time is right to pounce.
Why instead of a new tax on consumers the state doesn’t consider other options like a lottery, sports betting and gambling tax, I don’t know. And I’m not personally opposed to a modest tax at the pumps, but this legislation does more than that.
The proposed gas tax increase includes measures that would double-tax Alabamians who own energy-efficient electric vehicles or hybrid vehicles, like Priuses.
Proponents of the gas tax bill calculate that the average Alabamian would pay an additional $55 per year if the increased rates pass. For owners of electric vehicles, the bill would require them to pay a new annual tax of $250 in addition to the taxes they pay on the electricity required to run their cars. If this tax passes, Alabama will be taxing the owners of electric vehicles at a higher rate than any other state in the nation.
There is a misconception that electric cars are a luxury, but there are plenty to choose from besides a Tesla; as a matter of fact the two most popular are the Nissan Leaf and Chevy Volt. You can buy a new Leaf for a little over $20,000 or a used one for half that.
California, with more than 300,000 electric vehicles, recently imposed a $100 fee that goes into effect next year. However they offset that fee with a $2,500 rebate and provide HOV lane access for electric cars. That’s a plan I could support.
Let’s not be like Georgia where electric vehicle sales were soaring until the state repealed its incentive program and enacted a $200 annual user fee, causing sales to plummet 90 percent.
As most know, hybrid vehicles require gasoline, which means hybrid vehicle owners will pay both at the pump and the annual tax. Alabama's proposed tax of $125 per year would also be the highest in the nation.
These new taxes are particularly egregious in light of the new Mercedes-Benz electric battery plant opening in Bibb County and the 12,000 jobs that have been created in our state to help build energy-efficient cars. Our state cannot continue to attract high quality manufacturing jobs if we are suppressing demand for the state-of-the-art technology these companies rely on.
In summary, Governor Ivey, who prior to being elected told us that Alabama has all the money we need, is now asking the legislature to increase the gas tax, require electric vehicle owners to pony up $250 a year while offering no incentives, and require hybrid owners to pay an additional $125 a year, despite the fact they also will be taxed at the pump.
I’m all for fair; this isn’t fair. Here’s a novel idea: maybe instead of this unreasonable flat tax legislators should consider taxing all vehicles based on miles traveled. Even-steven. Better yet, the state could offer incentives as other states do to offset the tax about to be imposed by the legislature.
Regardless, with only 2300 electric vehicles currently being driven in Alabama, maybe we should be more encouraging and less taxing.