Senate Committee Struggles to Gain Traction for Cleaner Vehicles

Questioned about what technologies administration prefers, Christie remains uncharacteristically silent

Powered by compressed natural gas, this school bus is one of a new breed of greener vehicles.
Few dispute the notion that New Jersey needs to expand efforts to usher in a new era of cleaner vehicles, a step advocates say will improve air quality and potentially create tens of thousands of well-paying, green jobs.

Now comes the hard part.

How is the state going to achieve that goal? Who will pay for it? Which alternative fuels should be selected for state backing? And what mechanism should the state use to spur growth in this sector? Awarding tax credits to consumers who buy vehicles? Diverting other state revenues to the effort? Or by granting exemptions from state sales taxes?

All of those questions — and others — are on the table thanks to at least a dozen bills under consideration in the Legislature. But so far there is little consensus emerging among either lawmakers or the Christie administration.

That became clear yesterday as the Senate Environment and Energy Committee continued to try to figure out how to promote broader use of alternative fuel vehicles, a deliberation likely not to be decided until the end of the year, at the earliest. Only a handful of the bills came out of the committee.

The hearing ended with Sen. Bob Smith (D-Middlesex) practically begging Christie officials to tell the panel what type of incentives they were wiling to support.

“Just give us a clue,’’ Smith told Bob Marshall, an assistant commissioner of the state Department of Environmental Protection, at the end of the more than two-hour hearing in the Statehouse. “Give us a little direction.’’

Smith implored Marshall to provide answers to a series of questions he argued need to be answered: What kind of financial incentives are tolerable to Gov. Chris Christie, who has vowed to veto any new spending initiatives passed by the Legislature? Does the governor support incentives to build plug-in electric charging stations on the Garden State Parkway and New Jersey Turnpike? What type of business fleets ought to be offered incentives to convert their trucks, cars, and vans to cleaner running fuels?

Marshall remained noncommittal, declining to comment on specifics of the various bills being considered by the committee. Instead, he offered a series of issues, which must be addressed before the administration moves forward.

The topics focused on whether efforts to promote cleaner-running cars ought to be more appropriately addressed at the federal level; whether the costs of the efforts will increase costs to consumers and businesses; and whether there are any unintended consequences of promoting alternative fuels.

Underlying the Christie administration’s reluctance to endorse various legislative initiatives is its oft-stated aversion to picking so-called winners and losers in the free marketplace by endorsing specific technologies.

If there were any consensus at the hearing, most speakers advocated concentrating efforts to convert company fleets to natural gas as having the most immediate impact and be the most cost effective. Kevin Lynott, a lobbyist for Elizabethtown Gas, suggested focusing on promoting natural gas conversions for trucks, buses and high-mileage vehicles.

Three of the bills adopted by the committee provided various incentives to promote compressed natural gas vehicles, but even those measures precipitated debate among Republicans and Democrats on the panel.

One bill (S2192) would provide a $250,000 grant program encouraging compressed natural gas and electric vehicle conversion programs. The strategy would be financed by diverting money from the Societal Benefits Charge (SBC), a controversial surcharge on utility ratepayers’ bills.

The SBC has often been used by lawmakers in recent years, as well as by administrations, to not only fund programs without raising taxes, but also to plug holes in state budgets. It raises more than $700 million.

Republicans on the committee suggested the money should instead come from a green economy training program funded by a federal grant, a proposal Smith agreed to go along with, provided the administration and federal government are willing to support it.

Beyond what financial incentives ought to be put in place to encourage alternative fuel vehicles, several members also said the state needs to focus on what happens if big credits end up sharply curbing revenues raised by taxes on gasoline, which help fund transportation projects in New Jersey.

Referring to the incentives to promote alternative fuels, Sen. Jim Whelan (D-Atlantic), who worried the proposals might erode funding for transportation projects, said, “If this takes off, that starts to take a big chunk out of the gas tax, which already doesn’t provide enough for the Transportation Trust Fund.’’

Whether the GOP administration will go along with various tax breaks to spur development of highly fuel-efficient vehicles is another issue. One bill (S-595), sponsored Sen. Jennifer Beck (R-Monmounth), would cost the state treasury up to $90 million a year by sparing high-mileage vehicles from the state’s sales tax for two years, according to Whelan.

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