Oregon, Washington Seek To Juice Electric Car Sales With More Incentives

Dec 19, 2014
Originally published on December 20, 2014 7:03 pm

A coalition in Oregon and the Democratic governor of Washington want to juice sales of electric cars by providing more state incentives.

But some critics say more taxpayer giveaways for those drivers are unnecessary.

One of the new subsidies that Washington Governor Jay Inslee proposed earlier this week is a bill credit on the electronic toll accounts of electric car drivers to cover a yet-to-be-determined number of free ferry trips or toll bridge crossings.

Inslee is also asking the state legislature to extend by ten years the sales tax waiver for buyers of 100 percent electric, natural gas, propane and hydrogen vehicles. That sales tax break, which has already been extended once before, is currently scheduled to expire on July 1, 2015.

Oregon doesn't charge sales tax, so a relatively new public-private partnership there -- called the Energize Oregon Coalition -- has drafted legislation to offer a $3,000 rebate on battery-powered cars.

"In order to achieve our greenhouse gas reduction goals, EV's are a very critical part of that," said Oregon Department of Transportation electric car czar Ashley Horvat. "We're sort of seeing the adoption (of electric vehicles) plateau. So, we need that additional accelerator to push it beyond the early adopters."

Some commentators and lawmakers in Washington state argue these tax incentives represent a needless giveaway. "Even in the best case scenario, two out of three people benefitting from the sales tax break would have purchased the car anyway," wrote Washington Policy Center analyst Todd Myers in a blog post earlier this year.

Myers wrote the impact of the incentives "is probably very small and wastes huge amounts of money for tiny environmental benefit."

Governor Inslee's budget writers estimated the cost of the alternative fuel vehicle sales tax exemption at $177 million over ten years.

Neighboring Idaho offers no incentives to spur electric car purchases. At present, the State of Oregon offers a small tax credit to subsidize the cost of installing a charging station at a residence, if needed.

Alternative fuel vehicles have a higher upfront sticker price than comparable gasoline-powered autos, sometimes much higher. The proposal prepared by the Energize Oregon Coalition for consideration by the 2015 Oregon Legislature envisions a tiered set of incentives. The proposal was also pitched to Democratic Governor John Kitzhaber's office, but the governor did not include funding for electric car rebates in the state budget he recently drew up.

"What the bill would do is make it more affordable for the middle class," said Horvat. She said buyers of battery electric and hydrogen fuel cell vehicles would qualify for a $3,000 rebate. Plug-in hybrid electric car buyers could get back $1,500. Zero-emission motorcycles would qualify for $1,000 off.

"The top motivator is money off the top at purchase," agreed Tonia Buell, director of public-private partnerships at Washington State Department of Transportation. The Inslee Administration's proposed extension on the existing Washington incentive includes a new twist -- a cap on the amount of the tax waiver. The bill exempts sales tax on the first $60,000 of the purchase price.

"I like the idea of a cap," said Republican State Representative Ed Orcutt of southwest Washington. "There's a perception out there that EV's are for rich people. Do we really need to incentivize that?"

California continues to offer the most generous electric car incentives in the West. Besides a rebate on purchases, California allows solo drivers behind the wheel of battery-powered vehicles to drive in carpool lanes. Horvat said that incentive would not have much sway in Oregon because there are so few miles of restricted lanes.

In Washington state, policy makers considered copying California's HOV lane exemption, but rejected it. "HOV lane access doesn't work for Washington because we're already at capacity," Buell said.

Separately, the Inslee Administration proposed to create a revolving loan fund to incentivize businesses and private property owners to install public charging stations. "The EV infrastructure bank would the first of its kind in the nation," said Buell, whose office at WSDOT would administer it if the Washington Legislature approves the idea.

She explained the state "bank" would offer no-cost or low-interest loans to pay for the capital costs of installing publicly-accessible charging stations. The owner of the charge point would presumably pay back the loan as least partly by collecting a fee for each recharge by a driver.

Copyright 2014 NWNews. To see more, visit http://www.nwnewsnetwork.org/.