ARIZONA'S ALTERNATIVE-FUEL BOONDOGGLE

You can't do much worse than botch up a bad strategy. Welcome to energy governance in Arizona.

Nov 3rd, 2000

You can't do much worse than botch up a bad strategy. Welcome to energy governance in Arizona.

The state's government enacted generous incentives for vehicles that use fuels other than energy. Now it's choking on unanticipated cost.

So it goes when governments preempt markets in fundamentally economic matters such as fuel choice.

Arizona thought it was acting on behalf of the environment, the politics of which bestows automatic blessing upon any vehicle fuel that isn't gasoline.

The Arizona Clean Air Act of 2000 thus offers users of vehicles able to use nongasoline fuels cash rebates and tax credits said to be worth as much as half the costs of qualifying cars and trucks. To qualify, vehicles must only be able to run on nongasoline fuels. If they also burn gasoline, they still get the incentives.

There are reports that motorists have attached small propane tanks to vehicles they continue to operate on gasoline, just to feed at the clean-air trough.

The incentives are so generous that, according to a report in the New York Times, 22,000 state residents since July have filed applications worth an average of $21,966 each. So a program originally estimated to cost the state less than $5 million/year already hangs nearly $500 million in liabilities over a government with a $6 billion/year budget. State officials say the potential costs might yet rise to $800 million.

Gov. Jane Dee Hull called an emergency session of the state legislature to impose a 1 year moratorium on the program. She and others are examining the role of House Speaker Jeff Groscost, who pushed through the alternative-fuel incentives.

Groscost admits to having benefited personally from the incentives. And he encouraged a federal action that expanded the number of vehicles eligible for the Arizona program.

Arizona thus faces a major fiscal problem because an expensive boondoggle with the words "clean air" in its title slipped through the Arizona legislature without anyone asking tough questions.

It's easy to see how it happened. Legislators with a full agenda and short session didn't want to appear hostile to an environmental initiative. They assumed that substitution of anything for gasoline would help Arizonans. They quit thinking.

So botched execution of a flawed strategy yielded fiscal emergency and possible scandal.

And the long record of government meddling in matters of fuel choice tallied another expensive failure.

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