State’s wrongs: Cash for clunkers proceeds on the state level

While we’ve outlined the proposed federal cash for clunkers program and we’ve looked at several similar programs outside America, the fight against these programs should not stop there. In fact, there’s probably a greater threat of seeing one of these bills passed on the state level than there is of seeing it passed on the national level.

Perhaps the most threatening one is in North Carolina, where their House Bill 1207 (pdf) – titled the Clean Cars/Vehicle Retirement Program, filed April 7, currently sits in the (deep breath now) Committee on Environment and Natural Resources, if favorable, Commerce, Small Business, and Entrepreneurship, if favorable, Finance. In the bill, any vehicle from the 1995 model year or or older (so, presumably, meant to target OBD I and earlier vehicles), if crushed, is worth a $1,000 to $1,500 voucher toward the purchase of a new car. The plan doesn’t seem to discriminate between buying a new domestic or buying a new import.

Another one we’ve seen comes from the Washington state legislature, House Bill 2059 (pdf), with the title-slash-brief description of “Creating a sales and use tax exemption to encourage the purchase of motor vehicles that reduce air pollution.” This one works a little differently: While still aimed at older vehicles (15 years old or older), it allows somebody who trades an older vehicle in on a new, fuel-efficient vehicle to avoid paying the taxes on the new car up to $2,000.

(Note that SEMA released a statement saying that Washington’s House Finance Committee “chose not to consider the bill,” but if so, the Washington House’s website hasn’t yet updated the bill’s status.)

Neither of these two bills – and, we presume, any other state-level scrappage bills – are aimed at rescuing the auto industry. Instead, both have the stated aim to reduce air pollution in their fair states, and we’ve already seen that scrappage has a dubious claim on reducing air pollution. The North Carolina bill even has this little passage:

Whereas, the current state of the nation’s economy is exacerbating the problem of the inability of lower income vehicle owners to retire older vehicles and replace them with newer, cleaner vehicles;

Oh, okay, so this is being done for the sake of the poor. Right. Because the people who are over their head in their mortgages and who are losing their jobs left and right are worried about buying a hybrid vehicle. No, they just want a car that runs and that can get them reliably to their next job interview.

Meanwhile, in Canada (our 51st state, right?), Ford’s telling the Canadian government they’d like to see a beefier scrappage program in place, and that they’d like to see all the new-car taxes generated by such a program put back into the program instead of in the government’s coffers, thus allowing the program to benefit only the domestic automakers. Apparently, Canada already has a cash for clunkers plan in place, but it only gives C$300 per clunker.

One thing we haven’t mentioned yet comes to mind here: The Reuters article linked to above states that 30 percent of the cars on Canadian roads are more than 10 years old. Other articles we’ve linked to in recent weeks have made similar statements. Has nobody stopped to ask why that many supposed clunkers are still on the road? Has nobody thought to ask why they weren’t all naturally retired at the 10-year mark (or 15-year, or 9-year, or whatever arbitrary number they choose for their plan)? Has nobody thought that there might be so many because people are still actually extracting use out of them?

No, I guess not. Instead, everybody’s thinking, “Hey, that’s 30 percent of the cars on the road that should be new, but aren’t.”

If you live in Washington state or North Carolina, start writing to your legislators now. And if you know of any other state cash for clunkers bills, let us know here.

UPDATE (21.April 2009): I did a brief search of the other 50 states, and the only other scrappage-related bill I found was in California, where, if I’m reading the legislation right, a cash for clunkers program already existed via the smog check system. So under the current system, if your clunker doesn’t pass California’s smog test, you have one of two options: Get it fixed with assistance from the state (if you’re poor enough), or crush it and get some money from the state. The bill, A.B.823, simply increases the income threshold for people to apply for repair assistance, but also increases the amount of money paid for a clunker from $1,500 to $2,000. Introduced back in February, it’s still in committee.

UPDATE (22.April 2009): I’m still wrapping my head around California’s complicated smog laws. Apparently, current law exempts pre-1976 vehicles from smog checks, but as reader Alden Merchant pointed out, another bill currently wending through the California legislation, A.B.859, would require smog checks for any vehicle 15 years old or older, starting January 1, 2011. The bill, which was introduced in February, is still in committee.

UPDATE (23.April 2009): See John Quilter’s clarification of A.B.859 in the comments below. Either the bill isn’t clearly worded or I wasn’t taking my PayAttentionStupid pills yesterday.