Democrats in the Oregon legisature are showing a reckless disregard for the consequences as they extend the so-called “clean-fuels” program, which they’re about to do. Their own revenue office told them that while the effect on state revenue cannot be determined, it could be bad, but the supporters of SB 324 don’t care.
The bill, which cancels a sunset clause on the program this year, has passed the Senate and been cleared by a House committee for a vote on the floor. But take a look at what the Legislative Revenue office says about the effects.
The tax experts say that because the program will raise fuel prices at the pump, the state highway fund “might” receive less revenue. “However, the level of the price increases are (sic) not known to a degree that allows for evaluation and forecasing of the price elasticity or impacts on demand.” In other words, they have no clue how severe or light the effect on the highway fund will be.
The program calls for fuel producers and suppliers to reduce the carbon “intensity” of motor fuels 10 percent by 2025. Producers who can’t comply can pay for “credits,” meaning they’ll support the makers of alternative fuels. Or they can pay penalties. “The structure and revenue from these penalties is (sic) also not clear at this time,” say the revenue experts, who seem to have trouble with grammar.
How about the effect on personal income and other taxes? The tax experts say the idea of the bill is to provide an incentive for production of alternatve fuels in Oregon, which would increase employment and tax revenue. “It could on the other hand expand the reliance on out-of-state imports of fuel blends, consequently reducing investments, employment and income and the associated tax revenues.”
So the legislation might in fact have an effect opposite of what its supporters claim. The Revenue Office can’t be sure. “In conclusion,” it says, “the net effect of interactions of these forces is highly uncertain and equally likely, which leads to the indeterminate revenue impact designation of this measure.”
Responsible legislators would not impose such an uncertain program on their fellow citizens, or so you would think. (hh)