CHARLESTON, W.Va. -- A battle is brewing between Gov. Earl Ray Tomblin and West Virginia lawmakers over whether to continue giving tax credits to people who buy electric and hybrid electric cars.Tomblin proposed a bill in February that would eliminate that credit and give credits solely to cars that run on natural gas, propane or butane.On Friday, the West Virginia Senate Transportation Committee revised Tomblin's bill to restore the tax credit for electric cars as well as for solar, hydrogen and liquid coal-fueled vehicles.The committee of seven Democrats and two Republicans adopted the changes by a unanimous voice vote.Tomblin's original bill also would have made the change retroactive to Jan. 1 so that anyone who has bought an electric or hybrid vehicle this year would lose the credit that they thought was there.Republican Sen. Bill Cole said the changes should not be applied retroactively. Cole, a car dealer, said he liked parts of the bill but thought it was the federal government's role to promote new technologies.For passenger cars, the tax credit is worth 35 percent of a vehicle's purchase price, up to $7,500.
Tomblin's bill also eliminated a credit for installing a home refueling station for alternative fuel vehicles. The committee version restored that credit.The Tomblin administration proposed the changes to the 2011 law because they said it was costing more than expected. They also said the original intent was to promote cars that run on natural gas, which is produced in the state.Tomblin's original bill was projected to save $10 million in the next fiscal year and more than that in subsequent years.
Sen. Robert Beach, chairman of the Transportation Committee, said he spoke with various individuals and agencies that wanted the tax credits preserved."We believe the bill motivates individuals into stepping up and developing some of those natural resources that we have," Beach said.West Virginia environmental groups and the West Virginia Coal Association -- not normally allies -- both opposed eliminating the tax credits.With the state budget tight -- tax collections for the current year could be $70 million below expectations -- the Tomblin administration said they would not accept the committee's version of the bill.Rob Alsop, Tomblin's chief of staff, said the administration "won't live with those" changes and will work to replace them as the bill progresses.
Deputy Revenue Secretary Mark Muchow said that the committee's bill would negate most of next year's $10 million projected savings, although compared to current law it would lead to savings a few years down the road. Muchow also said that West Virginia's tax credits are among the most lucrative of their kind in the country.The bill now heads to the Senate Finance Committee.The tax credits have been used to offset the higher price of plug-in cars, which tend to be more expensive but require little to no gas and emit almost no pollutants.The extent to which plug-in electric cars are more environmentally friendly varies. In West Virginia, which gets most of its electricity from coal, natural gas or wind, a plug-in electric has a carbon footprint equivalent to a traditional car that gets 42 miles per gallon, according to a 2012 study by the Union of Concerned Scientists.Tomblin's bill and the committee's version end all the tax credits in 2017. The current breaks stop in 2021.There are currently federal tax credits of $7,500 for electric cars, up to $7,500 for plug-in hybrids and $4,000 for natural gas-fueled cars.