Green bills could do far more with targeted taxes

EARTH DAY CAME a bit late at the State House, but what lawmakers lacked in timeliness they more than made up for in quantity. April ended with the House and Senate both busy passing bills to require, encourage and reward energy efficiency.

There were bills in both bodies requiring state agencies to replace regular light bulbs with compact fluorescent light bulbs and to reduce energy consumption by 1 percent a year. There was one to keep local governments from discriminating against energy-efficient heating and cooling systems. There were tax breaks for people who buy everything energy-efficient from light bulbs and ceiling fans to dishwashers and manufactured homes, from alternative fuels to alternative-fuel vehicles. There was a plan — which was sent to the governor last week — to extend the tax breaks we already give to ethanol-production facilities. There was even a bizarre bill to have a state agency create a non-profit corporation to accept tax-deductible donations to assist low-income residents with energy conservation.

While it’s unlikely our country will get anywhere near where it must without congressional action, it’s encouraging to see state lawmakers getting serious about one of the biggest challenges of the 21st century.

Most of the bills contain good ideas — as far as they go. But they stop short of the kind of bold changes our nation is overdue for. The mandates on state agencies, for example, are filled with outs, allowing agencies to get exemptions even from the light-bulb requirement, and providing no penalties if they miss the goals.

Worse, by pulling up short, the tax bills can do more damage than good. The smart thing about these bills is that they use the tax code to reward behaviors we want to see more of. But they’re yet another batch of tax cuts, and as such they reduce overall tax revenue and skew the balance of tax burdens.

As messed up as our state’s tax code is, there’s no way to completely fix the problems caused by ad hoc tax changes short of an overhaul. That means throwing out all the exemptions and credits and special favors, and even the taxes themselves, and starting all over from scratch, to build a system that spreads the tax burden as wide and thin as possible, that is as fair as possible, that produces the revenue we need and that at every level seeks to encourage the behaviors we want more of and discourage the behaviors we want less of.

But while that is what legislators need to do — and what they must do — there are steps short of such a massive undertaking that could make these tax breaks do less harm to our tax code, and at the same time do more to promote energy conservation and independence. That is to add a stick to the carrot. To balance the tax breaks that encourage positive actions, lawmakers could add tax increases to discourage negative actions.

They could increase the sales tax on high-mileage vehicles, for instance — or simply remove the tax cap that keeps the tax at an artificially low $300 for the most expensive new vehicle you can find. Of they could raise the state gas tax — or eliminate the sales tax exemption, and start charging the same 6 percent levy on gas as we charge on clothes and DVDs and Big Macs.

There is nothing popular about increasing a gas tax, as pandering presidential candidates attest. But there is nothing more powerful that a state legislature could do to drive down energy consumption and help free us from the petrodictators.