The Hybrid Penalty

[January 29th, 2003] Rolly Cassens didn't vote for Ted Kulongoski, but he's counting on Oregon's new governor to rectify an injustice.

In August 2001 Cassens, a retired construction worker from Hermiston, bought a Toyota Prius, the top-selling hybrid car in America. What he soon learned was that because of a quirk in state law, he will now be charged $30 per year to register his vehicle, twice the normal rate.

"The President says we should clean the air up," says Cassens, a lifelong Republican. "I'm trying to do the right thing, and I get stabbed in the back."

Oregon's hybrid penalty was created in early 2001, when the Oregon Department of Transportation quietly pushed House Bill 2133 through the Legislature. Hidden in the fine print was a clause that doubled registration fees for hybrids, the ultra-efficient cars that combine the best elements of gas and electric engines. The law went into effect a year ago.

Many of Oregon's 2,000 hybrid owners have reacted angrily to a policy that they claim penalizes them for helping the environment, a complaint that last year caught the attention of candidate Kulongoski.

On his campaign website, Kulongoski claimed that the current policy "actually discriminates against hybrid vehicle owners." And, he suggested, "We should charge a lower fee for hybrids than for less fuel-efficient cars."

DMV spokesman David House insists there's a good reason for the current law. The Oregon Constitution states that drivers must pay their "fair and proportionate" share of highway costs. The main way they do that is through Oregon's 24-cent-per-gallon gas tax. But since hybrids use half as much gas as the most efficient conventional vehicles on the market, hybrid owners aren't paying their share, House claims.

"It's a pay-for-use concept," he says. Even with the double registration fee, according to House, hybrid drivers still pay less than they should. He notes that the average conventional vehicle uses about 740 gallons of gas each year, which generates $177 in gas taxes. A typical fuel-sipping hybrid can do the same mileage on just 310 gallons of gas, meaning it pays only $75 in gas taxes. Even with the extra $15 fee tacked on, hybrid drivers are paying the state $87 less than their conventional cousins each year.

Following that path to its logical extreme, however, would lead to the conclusion that owners of gas-guzzling SUVs should pay a lower fee. Besides, taking a different statistical trip leads to the conclusion that hybrids actually are pulling their weight.

The Ford Excursion, a 7,700-pound behemoth, gets 15 miles per gallon on a good day. Honda's Civic Hybrid weighs a third as much and is three times as fuel-efficient, at 45 miles per gallon. Although the Civic pays a third the gas taxes, it creates only a third as much wear on the highway.

Defenders of the higher registration fee spotlight state and federal tax incentives for buying hybrids. In Oregon, hybrid buyers get a one-time $1,500 tax credit, but that's meant to offset the higher sticker price on hybrid cars, not the running costs. And, House claims, the federal incentives will soon be phased out.

So will Gov. Kulongoski take candidate Kulongoski's advice and eliminate Oregon's hybrid penalty? Probably--but not by cutting the fee.

"We're definitely going to try to double the standard registration fee," says Scott Ballo, a spokesman for Kulongoski. "But the governor isn't saying we should increase the fee for hybrids as well."