By Tim Hunt
Special interest legislation that belongs in the trash canUploaded: May 17, 2016
When it comes to special interest legislation benefitting a single company, Sen. Bob Wieckowski (D-Fremont) is moving to the head of the class.
He has introduced SB 680 that would give a sales tax break to out-of-state customers flying into the Bay Area to take delivery on a new Tesla (manufactured in Fremont). It would also cover the few other “green” car manufacturers in the state (you can’t get off one hand counting them with Tesla being the overwhelming Big Dog in the discussion).
Wieckowski defended his bill in a Bay Area Newspaper Group report saying it was designed to encourage tourism as Mercedes-Benz and BMW have done for years in Germany. We, along with other family members, have picked up Mercedes at the factory outside of Stuttgart, driven the vehicles around Europe, and then had them shipped home. It certainly penciled out a few times.
There is, however, a rather key difference. The Bay Area is certainly a destination for those who love fine dining, wine, and the myriad of tourist attractions. The question comes how to do get your Tesla back to Omaha or Chicago?
And, in the case of our tourism, we paid full sales tax when we registered the car in California. Wieckowski’s bill assumes the same in the tourists’ home state, but readily acknowledged a loss of sales tax revenue and a hope to make it up on the tourist side.
It’s not chicken feed-- $7,500 on an $80,000 car.
Just call it what it is—a favor for Tesla and Elon Musk. Musk is a brilliant engineer and entrepreneur, who has managed to attach three of his successful companies—Tesla, Space-X and Solar City—to government subsidies or tax credits.
Some legislators in Sacramento have finally started to wake up and ask if they really need to give huge tax credits to people who have the means to buy Telsa sedans at $75k or more. Not only have tax payers subsidized rich folks in Atherton, Los Altos, Los Gatos and Hillsborough, anyone driving the electric vehicles does not pay any gasoline tax.
That means, they receive a subsidy on the purchase and then pay nothing to use the roads. That needs to change.
Gov. Jerry Brown’s May budget revise proposes to partially rectify this by establishing a $65 fee across the board for road use.
The long term solution is a true user fee based upon miles traveled as opposed to the fuel tax. Given the state’s goal of converting half of the automobile fleet to electric or hybrids vehicles by 2050, it is a necessary change.
It likely would involve some form of GPS tracking—think FastTrak on steroids—but that would be the fairest way to charge people for road use. Surcharge the heck out of trucks that are necessary but are far more damaging to the roads.