Louisiana Superdome

Louisiana Superdome

There's a storm a-brewin' in Louisiana over alternative vehicle tax credits. (There's a sentence that didn't end like you'd expect.)

In 2009, the state legislature passed Act 469 (PDF), which offers a tax credit of up to $3,000 to anyone who purchases a low-emissions vehicle that runs on alternative fuel, "including but not limited to compressed natural gas, liquefied natural gas, liquefied petroleum gas, biofuel, biodiesel, methanol, ethanol, and electricity."

Which is fine. Many states have such laws on the books, so Louisiana wasn't breaking new ground here. And in the grand scheme of things, Act 469 was cheap: estimators expected it to cost the state just $900,000 over five years.

All went smoothly until April 30, 2012, when Louisiana's Revenue Secretary Cynthia Bridges made an "emergency" ruling, which expanded the type of vehicles that qualified for the tax credit. Specifically, she added flex-fuel vehicles to the list, which seems reasonable, since "ethanol" was mentioned in the original bill.

As the always-astute Clancy Dubos at Gambit Weekly points out, this might not have been a problem, except for three curious things:

  • Here in Louisiana, some of the 112 vehicles included under Bridges' ruling are pretty popular -- especially among legislators. 
  • She issued the ruling on April 30, while the legislature was in session, and while news of the ruling wasn't widely disseminated to the general public, word traveled quickly on Capitol Hill.
  • And perhaps most damningly, Bridges made her ruling retroactive to 2009.
Close your eyes and imagine the scene of legislators dashing down to H&R Block to file amended returns for 2009, 2010, and 2011. Because that's pretty much what happened.

As a result, the bill's under-$1 million price tag shot up to $100 million in this year alone, mostly because of the retroactive clause.

The headlines piled up pretty quickly, with elected officials -- many of whom took advantage of Bridges' ruling -- feigning surprise, disgust, and a range of other false emotions, in a way that only Louisiana politicians can. 

Governor Bobby Jindal accepted Bridges' resignation and rescinded the ruling, though for a bevy of legal (and political) reasons, he's decided to let tax credits stand for those who filed their state returns before June 14.

Does this give alternative-fuel vehicles a bad name in Louisiana? Probably not any worse than they already have, given the state's cozy relationship with Big Oil.

But it does serve to remind us that if you're going to get sneaky with legislation, be careful whom you let in on your secret.