This entry was posted on 1/20/2008 10:42 PM and is filed under Legislation,Leadership.
This past week, Wisconsin's Lt. Governor Barbara Lawton and bill co-sponsors Senator Mark Miller (D-Monona) and Representative Pat Strachota (R-West Bend) announced an "Energy Star Tax Holiday bill." Lt. Governor Lawton is leading many important initiatives including planning a state climate change summit this Summer for municipal and environmental leaders, advocating for increased mental health care, and working to end cervical cancer in our lifetime. Unfortunately, the proposed Energy Star Tax Holiday legislation is a bad idea. Excerpts from the press release:
".... a bipartisan measure that would designate one week each year for people to buy Energy Star certified appliances without paying sales tax.
The bill specifies: • A Tax Holiday during the seven-day period beginning on the Saturday before April 21, the first Earth Day • No sales tax will be assessed on eligible Energy Star certified products during the Tax Holiday • Appliances must be for residential use by the purchaser • Appliances must cost $1,500 or less
Examples of qualifying appliances include, but is not limited to: • Refrigerators • Dishwashers • Programmable Thermostats • Clothes washers and dryers"
The problems with this proposed legislation * It will cause some Wisconsinite's to wait longer before buying new Energy Star appliances; for example: - those that are considering buying an appliance now, may wait to see if this legislation passes and then wait until April if it does; - those that learn of this 'holiday' after it occurs each April, may wait numerous months before replacing their appliance(s). What about the well-intentioned consumer that plans to make a large purchase, but forgets and misses the tax holiday week? * It will likely create terrible inefficiencies for retailers. If you were a retailer, would you support this legislation?
This proposed bill could result in a net increase in energy use and greenhouse gas emissions.
Questions for the sponsors: "What is your estimate of the greenhouse gas emission reductions and energy savings that will result from this bill? What assumptions did you use for when consumers will make the switch in your "without bill/with bill" comparison?"
This type of micro-meddling is exactly what government shouldn't do.
Worst of all The biggest problem with poorly thought out energy-related proposals like this? It lulls us into a state in which we believe we're taking the required actions and we become even more complacent in the face of these "killer" problems - global warming and U.S. dependence on foreign energy. From Professor Jon Foley, Director of the University of Wisconsin-Madison's Center for Sustainability and the Global Environment (SAGE):
Increased deaths among the poor - an extremely conservative estimate (he said the actual number could be 10X this) is that CURRENTLY, 150,000 PEOPLE PER YEAR ARE DYING PREMATURELY AS A RESULT OF GLOBAL WARMING - CAUSES: INCREASED DISEASE, DROUGHT AND FLOOD.
In closing Individual state action to improve state energy policy is a good thing. It gets us going in the right direction, raises awareness, and puts pressure on those with the power to really solve the 4 biggies - our federally and nationally elected representatives.
"The measure has the support of Wisconsin Manufacturers and Commerce, Sierra Club, Wisconsin Merchants Federation, Wisconsin Environment, National Federation of Independent Business, Wisconsin Independent Businesses, 1000 Friends of Wisconsin, and the Wisconsin League of Conservation Voters."
And the same page talks about the environmental benefits:
"The Wisconsin Energy Conservation Corporation estimates that if only 1,000 homes switch to Energy Star refrigerator, dishwasher, 25 CFL light bulbs, and a clothes washer they would:
* Keep 2,408,282 pounds of carbon dioxide from being release into the atmosphere * Save $161,334 in annual electric costs * Save 662 tons of coal from being burned * Be the equivalent of removing 214 cars from the road"
Tax incentives for energy efficiency is the exact sort of proposal we should be supporting. Reply to this
Yes, the bill is supported by top state-wide environmental and business groups. I don't understand why. Yes, the press release states "if only 1,000 homes switch to Energy Star refrigerator, dishwasher, 25 CFL light bulbs, and a clothes washer they would: .............", this is true. But what about the question of WHEN these switches will occur given the effects this proposal will have on consumer behavior??
Did the sponsors account for consumers that use the tax holiday to purchase additional appliances that they may not have purchased without the bill?
If we really want to create an incentive for purchasing Energy Star certified products, why does this bill offer a tax holiday for just one week? Why not a permanent exemption?; or several years?; or two weeks? or two days?? Why one week?
What assumptions did the sponsors use regarding when consumers will make their purchases in their "without bill/with bill" comparison of greenhouse gases emitted (GGE) and energy used? If this legislation is passed, some consumers will wait until the tax holiday period to make their purchase - could be one week, could be 11 months. In fact, whether this bill passes or not, some consumers that may have purchased an Energy Star appliance shortly will read about this bill and wait for the possible tax benefit in April. So.....starting with the bill's press release on January 15th, 2008 this proposal is racking-up incremental increases in GGE and energy used.
Let's say the bill is amended to create a full-time tax exemption for three years. While some consumers wait we will still have the initial incremental increases in GGE and energy used, but then the net effect will be a decrease in GGE and energy used when the bill takes effect. This is good.....but, what will the cost in lost state tax revenue be? Is this the best way to spend our $ to combat global warming and reduce our dependence on foreign energy? What about increasing/creating incentives for home insulation?; buying smaller cars? buying smaller homes? carpooling?? Or, from a GGE and energy used standpoint, will we get a better return on investment by creating incentives for business and industry?
Trying to pick winners in this type of situation is communistic. Smells like a band-aid too.
So what's the answer to these energy-related problems that are literally killing people as you read this? Change the "rules of the game" for all, similar to patent laws and anti-trust laws, AND LET THE MARKET DECIDE. For example, we pay more for products all the time because we believe there is a net benefit to patent laws.
How best to change the rules? Enact a phased-in, federal tax shift from income to non-renewable energy so we begin to pay the external costs of energy use at the time we use it.
The Wisconsin sales tax is 5% so this bill is trivial--like most of the proposals to deal with climate change. I'm going to buy a new refrigerator to save 5%?
(and if I did buy a new one, I would keep by old one in the basement and use it also) Reply to this
