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You’ve probably already heard about Treasurer Alexi Giannoulias’ idea to provide $1000 rebates to purchasers of hybrid vehicles…
Illinois officials hope a $2 million program announced Sunday will encourage use of fuel-efficient vehicles by giving hybrid car owners a $1,000 rebate.
Here’s how it will work…
To fund the program, officials said, state funds will be deposited at local banks and credit unions at a below-market interest rate. The money that those institutions save in interest is passed to consumers in the form of $1,000 rebates at the time of purchase, they said.
To get a rebate, buyers must secure a car loan from a participating bank or credit union for a new hybrid vehicle or an eligible electric or fuel cell vehicle. Purchasers can receive one rebate per vehicle, allowing municipalities or other entities to receive additional cash back when acquiring fuel-efficient fleets.
More…
Hybrids can get up as much as 60 miles to the gallon, while producing dramatically less pollutants and greenhouse gasses. The cars can cost $1,200 to $10,000 more than their traditional-fuel counterparts.
Giannoulias, a first-term treasurer, will travel the state in his own Ford Escape hybrid to promote the initiative.
Question: What do you think of this plan? I’m not just asking about the encouragement for hybrid cars, but also would like you to consider the funding mechanism for the rebates. Explain.
posted by Rich Miller
Monday, Jul 16, 07 @ 9:36 am
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As treasurer, doesn’t Giannoulias have a fiduciary duty to the state? I’d be surprised if he doesn’t. It’s hard to see how investing state money at below-market rates would not be a violation of this duty.
Comment by Johnny Monday, Jul 16, 07 @ 9:51 am
Very good idea by Treasurer Alexi Giannoulias! I’m going to look into it because of the $1,000 rebate.
His plan is kick starting an otherwise morbid effort to get people to think smart.
Doug Dobmeyer
Comment by Doug Dobmeyer Monday, Jul 16, 07 @ 9:51 am
This sounds like it’s just expanding linked deposits to cover fuel efficient, enviro-friendly cars. It’s a good idea, but the real questions is how much the state loses; in other words, just how below market are the interest rates? If they fully cover the bank’s costs, then we should just consider giving a tax credit on hybrids. If the loss is only a portion of the rebate — possible because it gives these banks a marketing advantage in terms of auto loans — then it’s a good deal.
Like it or not, with crude oil at $77 a barrel, we’re all going to switch to hybrids and smaller cars sooner rather than later.
Comment by Anonymous Monday, Jul 16, 07 @ 9:52 am
Doesn’t the Legislature set policy in State Government?
Comment by Right Girl Monday, Jul 16, 07 @ 9:59 am
Anon - 9:52
This is how the deal works - for each hybrid loan made the state deposits $ 25,000 for 1 year at 4% below the market rate. Example
Market rate 25,000 earns at market rate 6% 1,500
Rebate to car buyer 1,000
State earns 500 or the remaining 2%
In this deal the bank pays market rate for the C. d. but the state in effect covers the 1,000 rebate by accepting the “net yield”
Comment by Anonymous Monday, Jul 16, 07 @ 10:01 am
Let me be sure I understand this, illinois tax dollars to subsidize the purchase of cars made in USA, Mexico, Japan, Korea? I’d have no objection if the grand is pro-rated based upon the US content of the car. 100% US made & content = $1,000; 100% foreign content & assemply = $0.
Comment by Anon Monday, Jul 16, 07 @ 10:04 am
Anonymous,
If we’re all going to switch anyway, why does the state have to pay for an additional incentive? And keep prices in perspective: crude is $72/barrel, unleaded is trading $2.21 (that’s ex-taxes and retail markup). As a percentage of household income, the cost of gas isn’t a record. Not that I’m against individual conservation, of course. Can the state invest some more money at 2% to lower the price of beef?
Comment by Greg Monday, Jul 16, 07 @ 10:07 am
It used to be that buying a vote was done with a little more tact than this.
Comment by Cook County Monday, Jul 16, 07 @ 10:15 am
a, people will buy electric, hydrogen or some other “green” as soon as they prove it works AND it is necessary (they haven’t)
b, feel good liberal talking point for AG’s run at office (gov sen insert-office-here)….smart move in a sheep (secular pro) state like this one.
c, a whole bunch of new ethanol plants being built in this state which are creating jobs and a form of renewable fuel…..how about some state backing (not necessarily monetary) for this industry which can do more, faster, to create self sufficient fuel generation than anything else. By the way, it also makes farmers very self sufficient at the same time (decreased farm subsidies anyone?)
Comment by Capitalist Pig Monday, Jul 16, 07 @ 10:18 am
A sheep state? Huh?
Comment by Rich Miller Monday, Jul 16, 07 @ 10:20 am
It is an idea, innovative. So the state loses money on the deal and loses money on the gas tax. I hope it works
Comment by Wumpus Monday, Jul 16, 07 @ 10:22 am
Oh darn, and I just bought a new super sized SUV tank that gets 2 gal. per mile.
Comment by Little Egypt Monday, Jul 16, 07 @ 10:25 am
Consumers will know when buying hybrids make economic sense. Unless the hybrid vehicle price is low enough/gas price is high enough, rational economic actors will not bite.
Having the state treasurer step into the equation makes little sense. The state is essentially taking a 4% hit on investment income to disburse state funds to a favored group–in this case new hybrid buyers.
The state treasurer is supposed to be the state investor. Not very glamourous. Looks like Alexi wants to expand his role as Santa Claus and his profile.
Comment by Wilson Monday, Jul 16, 07 @ 10:26 am
10:01 has it right. If Alexi can use his office to get an advantageous interest rate - which he should be able to accomplish - the extra interest made on an initial investment would cover the rebate. $1,000 is not a lot as the feds give a tax credit of $3,500, and that figure could increase.
I do like the promotion of hybrid vehicles. Of all the “global warming” shenanigans that perpetuate both sides, hybrid cars are practical, affordable and don’t force the electorate to alter too much of their lives. If marketed correctly, and when combined with programs such as this rebate plan, hybrids can possibly help the “Big Three” recover. Of course, Ford would probably find a way to screw it up, but one can always hope.
Comment by Team Sleep Monday, Jul 16, 07 @ 10:29 am
I give the treasurer credit for his innovative and fresh thinking but the details of this idea are bad for a few reasons.
1) It’s not a true behavioral incentive to buy hybrids, its only an incentive to get a loan from designated participating banks. (I won’t even touch the conflict of interest issue here)
2) What about people or businesses who pay cash for cars? Shouldn’t they also qualify for state incentives to buy hybrids?
3) I recognize that he’s looking for creative financing for this incentive, but the bank loan portion seems ripe for bad actors to manipulate the system at taxpayers expense.
I think that a better public policy would be to create an incentive for people who currently use low-mileage vehicles for work related or high volume driving who could easily be driving high-mileage or hybrid cars instead.
Honda just shelved its Accord Hybrid because the mileage was not good, the standard 4cil Accord gets the same milage. So a Hybrid in itself doesn’t make cars more fuel efficient, this incentive should be applied to any car that averages more than a certain MPG - say 30 for example. That might be a better way to motivate a purchasing decision.
Comment by Napoleon has left the building Monday, Jul 16, 07 @ 10:32 am
So, I was actually 9:52am anonymous. I forget to add the usual nickname.
Anon @ 10:01 am: thanks for the detail. So, yes, if the state can get a $1000 subsidy at a cost of $500, it’s (imo) a pretty good deal — no need for the tax credit.
Anon @ 10:07am: I don’t view this so much a question of creating an incentive to conserve and go green, as a subsidy to those who in fact conserve and go green. Look, the extra $1,000 to $10,000 to buy hybrid is a lot of money for a lot of people; they could use the subsidy to go green. I think the incentive is already there, it’s just a question of affordability.
And thanks for updating the oil price. I got the $77 from Euronews (I’m out of the country right now), and that’s the European spot price.
And while I completely agree with you that gas prices are historically low, that’s really not the issue here. First, world economics are simply going to continue to drive the price up. Second, and more importantly, is how quickly the price of fuel has gone up.
I think only two years ago it would be unthinkable to have pump prices — even with all the taxes — be pushing $3 or even $3.50. The volatility creates a short term dilemna for the middle class wage earner. The only ways to reduce your gas consumption significantly is: 1) buy a more fuel efficient car; 2) change jobs to someplace closer to your home; 3) move closer to you job.
All these options involve significant costs. The real issue here for middle class Americans is the price volatility, not that the price is still historically low as a percentage of wages.
Comment by the Other Anonymous Monday, Jul 16, 07 @ 10:32 am
Al Gore’s son got a Prius up to 100 MPH! When they can hit 0 to 60 in 8 seconds and top end at 125 MPH then maybe they’ll have something. Until then we are again being asked to pay much more for much less, in spite of the rebate game. Not a good deal. Why can’t they price them BELOW conventional vehicles? Maybe the technology just isn’t advanced enough yet. Have you priced the cost of a full set of replacement batteries? Outrageous.
Comment by A Citizen Monday, Jul 16, 07 @ 10:37 am
I certainly like this idea better than when Topinka used similar state subsidy programs to fund things like the Gay and Lesbian Center in Chicago’s Boys Town, or the funding of her movie production program so a couple of her staffers could pretend they were actors in that HBO show Entourage.
Another homerun for Alexi, both on the public policy and the politics.
Not bad for the “Mob’s banker,” as he was recklessly called by the Republican woman who ran against him last year, and whose name everyone has already forgotten.
Lisa Madigan may be hearing footsteps on her 6.
Comment by GOP'er Monday, Jul 16, 07 @ 10:42 am
This reminds me a lot of how much money the state blew to promote Blago’s perscription drug benefit that no one signed up for. $2,000,000 worth of $1,000 credits means 2,000 cars. So, to benefit a potential 2,000 people (if that, as all of these cars would likely have been sold with or without the credits), Alexi will get travel around the state to campaign on the taxpayers dime to tout how innovative and “green” he is… not a bad way around illegally campaigning on the state’s dime. The man clearly has a bright future in Illinois politics.
Comment by team america, world police Monday, Jul 16, 07 @ 10:47 am
Some questions: 1. Does this rebate only apply to car purchasers who take out a loan? If so does it discriminate against purchasers who like to pay up front so as to avoid interest charges? 2. If it only applies to borrowers, would we get the rebate if we pay up front all except $5, and take out a loan for the balance?
Comment by Oakparker Monday, Jul 16, 07 @ 10:48 am
I currently own and drive a hybrid.
Hybrid cars are fine, but they are not the be-all and end-all of fuel savings. The market will determine when people buy hybrids or hydrogen or some other technology.
In addition, it is not the treasurer’s (or the state’s) job to subsidize automobile sales.
Comment by Fan of the Game Monday, Jul 16, 07 @ 10:50 am
Seems like the rebate should apply to all purchaser, not just people getting loans for their cars.
Isn’t limiting it to people who get loans just lining the pockets of Giannoulias financial buddies. Just more of the same dem bs.
Comment by the third anon Monday, Jul 16, 07 @ 10:52 am
I do find it disturbing that a State Official has unilaterally started a program which is likely more trendy than practical.
One thing to note is the the expected fuel economy from a hybrid. It is factually flawed to describe these vehicles as getting 60 mpg. The bes mileage is from the Honda Insight which runs very close to the egde of being a practical car. It is very small and 2 passenger as I recall. The real world mileage from the Prius owners I know is more like 35 mpg ciy, which is still very respectable, but not 60 mpg.
One of the best fuel saving vehicles, the VW diesel which do turn better than 50mph in the Jetta platform does not get an incentive. If the goal is to save fuel, then why not that vehicle?
FThis is welfare for the middle class. The poor and low wage earners who most likely could use a break from the high transportation fuel prices are left out in the cold since they are not buters of 20K+ vehicles of any type.
Second, the subsidy is only for those people who finance their cars. Seems like a carrot to the financial industry who we likely can agree go not need a sunsidy either. If there is a subsidy, then it should be for a purchase of any kind.
Has anyone done a fiscal analysis which outlines the costs and possibly sets a limit to this largess? Last I heard the state is in fiscal crisi and cannot put together a budget. What are the costs?
This is a muddled policy which at best aids people who do not need the help, and omits support for a vehicle which is argueably better in fuel economy and retains its utility as a conventional vehicle without the downside of battery disposal.
At worst it is subsidising foreign vehicle manufacturers (I believe that Ford licensed their technology from Toyota) and a class of vehilces which will have end of lif disposal problems for all those large, fairly exotic batteries.
If there is a need for incentives of this type, lets at least get some experts to review the available technology and develop a coherent plan.
Remember the unscientific rush to use corn as a source of ethanol has led to the doubling of corn prices used for food (think the poor), near record size plantings of corn acerage by taking land out the the land banks (think ecology) and by converting currently used land from other crops to corn (wait for the scarcity of these crops to skyrocket the price). We have yet to understand the effect of the millions of gallons of water taken out of our aquifers for the production of the corn based ethanol.
We should always be wary of the effects of unintended concequences.
Comment by Plutocrat03 Monday, Jul 16, 07 @ 11:04 am
1. Giannoulias has accomplished what the Governor could not.
2. Hybrid technology isn’t just about lower gas mileage, its also about cleaner emissions and cleaner air. Last time I checked, several thousand kids a year in the Chicago area were hospitalized due to respiratory problems. Who pays for dirty air? We all do.
3. Protecting the environment is part of the state’s Constitutional duties. Giannoulias has found a way to do it within the authority of his office, without the need for legislation.
4. When Topinka was Treasurer, she never showed initiative like this, which is why the General Assembly passed all kinds of legislation mandating discounted loan programs. This approach isn’t new, its just refreshing that its for clean air.
5. I’ve never heard so many Republicans complain about putting tax dollars back into the pockets of taxpayers in my whole life.
Comment by Yellow Dog Democrat Monday, Jul 16, 07 @ 11:17 am
I was simply explaining how the program works to help explain the program. I am neither advocating or suggesting it is a bad idea.
While I am a bank, who is not participating in the program I really don’t think there is much room as one comment said of “lining someone’s pocket. I acknowledge the state is going to accept a lower deposit yield (net of the rebate, for the bank’s that do participate I would expect will not pay more than normal market rates on any deposits.
Comment by Anonymous Monday, Jul 16, 07 @ 11:19 am
NO!
Comment by i d Monday, Jul 16, 07 @ 11:25 am
Why are Democrats always trying to pretend there’s a free lunch out there somewhere.
Comment by Cassandra Monday, Jul 16, 07 @ 11:36 am
It is insulting.
What nitwits like Giannoulais are doing is reducing our choices and our freedoms. They are using their elected powers to warp decisions that are always best made when thinking people are left alone to decide for themselves.
This isn’t a matter of being told what to do, and reacting like a child. This is a matter of being told what to do as if we are all too stupid to know what is best for us to do.
Do you like liberty and freedom? Then you ensure that people you elect don’t interfere with your abilities to choose, take personal responsibilities, and make adult decisions.
Those of you pleased as punch over this, should rethink what you believe regarding your neighbor’s intellectual capacities. Get off your high horse and start recognizing that people do what they do for intelligent reasons, even if you can’t figure them out. Time to reawaken a touch of humility within yourself. Start listening and stop whining.
Everytime enough voters whine, some power hungry politician takes the opportunity to “solve” the whiner’s problem with a solution that works best for only the politician.
Grow up. You want a hybrid - buy one. There are already enough incentives on them to make them affordable to you. But stop trying to control other people’s freedoms by demanding they choose what you think they should choose. Governments that incentivize behavior should be considered anti-democratic.
Comment by VanillaMan Monday, Jul 16, 07 @ 11:50 am
The carbon footprint of a gallon of ethanol is greater than that of a gallon of gas. The stuff doesn’t just magically appear. Corn production consumables plus the ethanol production petrochemical consumption plus distribution and lower mpg of ethanol make it less effective not more. It’s just another feel good scam - like those new low energy bulbs that are very fragile and when broken release mercury into your house at a level qualifying as a toxic waste site. I’m all for conservation when it really is effective and cost competitive.
Comment by A Citizen Monday, Jul 16, 07 @ 11:58 am
Why does the Treasurer even have the authority to do this? It is in effect giving away state tax dollars without any action by the revenue committees of the GA, for an environmental purpose, without any action of the environment committees of the GA. When Blagojevich circumvented the GA for stem cells, people around here screamed bloody murder. How is this different - a breathtaking usurpation of legislative Constitutional prerogatives.
Comment by Anonymous Monday, Jul 16, 07 @ 11:58 am
I agree with you, YDD. The national GOP has bellyached so much about the “Death Tax” that this should be easy to support. Instead, I guarantee you Andy McKenna will come out with some nonsensical (is that even a word?) press release and action e-mail. God forbid the GOP would do something that’s both progressive and supportive of the middle class.
And you know what? I’m glad Alexi is doing something for the middle class. Cars are getting more and more expensive, and it’s nice that there are now a couple of incentives to buy a hybrid. Hybrids are more expensive and a little rebate or tax incentive would be nice.
Comment by Team Sleep Monday, Jul 16, 07 @ 12:06 pm
Vanilla Man — Are you not-too-bright, or just a right-wing nut? Please explain to me how this program deprives you of your freedoms? Does it MANDATE that YOU buy a car? No. It’s an incentive, but the choice is still YOURS. Let’s see, “They are using their elected powers to warp decisions that are always best made when thinking people are left alone to decide for themselves.” Wasn’t that argument used against Lincoln when he signed that pesky Emancipation Proclamation? (And it WAS mandatory, unlike Alexi’s program!)
Cassandra — So, if I understand your basic philosophy, give aways and incentives and welfare are horrible horrible horrible, unless of course they are for big business and corporations, in which case they are “good for the economy”?? This is a non-mandatory, creative idea by the Treasurer that will help the environment (oh. . . another BAD thing if you’re a conservative). Of course I see your point–if TOO many people buy into this, it could cut into oil company profits, and they’d only make $9 BILLION more this year than last instead of $10 billion. It’s a good idea. Give it a try. Thanks, Alexi.
Comment by Ivote Monday, Jul 16, 07 @ 12:22 pm
Since it is about better MPG which does lead to less fuel being consumed per mile, why have we not been talking about transportation that has been around a heck of a lot longer?
Motorcycles. Cost anywhere from $3k on up, get gas mpg similar to hybrids without having to mfg 2 powertrain systems, and are already here. I have 2, 1 gets 60mpg and the other is at 48 mpg.
Where can I sign up for this?
Comment by Rebel13 Monday, Jul 16, 07 @ 12:23 pm
Good for Giannoulias.
Once again, another campaign promise kept. When he ran, he said he was going to do his part for the environment, and he’s doing it.
And for everyone screaming about him investing at below market rates, there are so many programs that Judy used and did the same thing, with no public benefit or consumer benefit resulting. And, judging by the reviews of Giannoulias’ 529 reform and his other investment strategies, right now it looks like he is going to get the best rate of return that this state has gotten in a while.
Hopefully, this moves the market a bit and encourages car manufacturers (especially American ones) to do more with hybrids.
Bravo Mr. Treasurer.
Comment by John 3:16 Monday, Jul 16, 07 @ 12:28 pm
Just like the state to subsidize consumption.
How about using this money to CREATE JOBS instead. Green is good, but jobs are better.
Comment by Johnny USA Monday, Jul 16, 07 @ 12:33 pm
If you want the finest example of “Going Green” with sincere commitment check out the Amish! Now there’s the true gold standard of honest, committed conservation. And they don’t need incentives.
Comment by A Citizen Monday, Jul 16, 07 @ 12:50 pm
I do commend Alexi for finding a way to break through all the noise his party is creating and land himself on the front page of the Sun Times.
What really bothers me is that the environment has become a partisan issue. I would think Republicans would be all about saving the planet…and I’m sick of Democrats only talking about global warming when there’s a Republican in the White House.
This is an issue that really should bring everyone together…too bad people on both sides can’t see past partisanship.
Comment by Jason Monday, Jul 16, 07 @ 12:57 pm
It’s a win for banks.
A win for new car buyers.
It’s a dumb for those buying beaters to get to work.
This is progressive? What’s become of Dems.
Comment by Bill Baar Monday, Jul 16, 07 @ 1:01 pm
The responses from YDD, Ivote, Team Sleep and John are in many ways why the State finances are a mess.
First you start out with a rabidly partisan positon which seems to simply support any spending of taxpayer funds without any thought about the efficacy of the program. Then you demonize either the writer of the opinion or the other party. Its a shouting match which resolves nothing.
Using a generous comparison which assumes that 2000 hybrids would not have been purchased without a subsidy, they replace 2,000 vehicles which get 15 mpg, the hybrids actually get 45 mpg, these vehicles average 10Kper year and gas is 3.00 per gallon, the State will collect $478,783. less in gas taxes.
There should be a public discussion whether “Spending” 2.5 million to save 888,900 gallos of fuel is a good public policy. Of course we need to also take into account the potential additional medical costs of injuries associated with lighter vehicles being involved in collisions and the costs associated with first responders who have to learn to provide life saving support without being injured by the huge electrical energy being stored in the batteries.
Proclimations simply avoid any discussion of the matter.
My point is to simply demonstrate that this as well as many other issues are complex and have many concequences. It is arrogant for an individual to use his power of office in a way that provides less than the optimal use of the citizen’s money. There should be a public debate and the legislature should be formulating policy.
State Treasurer is the wrong office to promulgate environmental policy. It is simply grandstanding and running for higher office (much like the governor) with the hard earned money of the taxpayer.
Comment by Plutocrat03 Monday, Jul 16, 07 @ 1:20 pm
Why does the government care how many MPG we get? Why does the treasurer think that hybrid is better than diesel or hydrogen? What business is it of government what people drive.
Again, if the market can provide the public with a car that is cheaper to own and is cleaner, then people will buy it, and the market will flourish. If such cars cannot be produced, then they won’t. Either way, the State of Illinois has no business in the business of promoting one type of vehicle over another.
Comment by Fan of the Game Monday, Jul 16, 07 @ 1:41 pm
Let’s see: In order to be able to get $1,000 back from buying a hybrid, Alexi says that you have to go “borrow” money? This sounds like it is right up Governor Blagojevich’s alley. We Democrats want to encourage you citizens to go deeper into debt like our state government does in order to get something kicked back to you. I have a novel idea! How about giving “everybody” $1,000 back if they buy a hybrid vehicle in Illinois? You won’t even be forced to go borrow money in order to qualify!
Then, how about giving this $1,000 rebate back to the people that buy a hybrid automobile by issuing them a tax credit on their Illinois state income tax return? That way we are not playing favorites by only allowing those banks and lending institutions that “participate” in our hastily conceived idea to offer a freebie to the public but only if you agree to do business with them and not their competitors. Only “special groups/interests” that are “participants” in this freebie by the state are allowed this special privilege. Grossly unfair to other lending institutions? You bet.
Keep it simple, Alexi. Give this $1,000 hybrid rebate back through the state income tax. Don’t make people go out and borrow money at your friend’s banks in order to participate. Your general idea (encourage hybrid autos) is great but your follow-up plan on how the state is going to implement it seems to have been concocted in about 10 minutes over a couple of cold beers. Not very well thought out for a guy who is in charge of handling our state’s millions of dollars, in my opinion. You are starting to scare me.
Comment by Clara "The Clairvoyant" Monday, Jul 16, 07 @ 2:02 pm
I think its great program. Cars have a social cost that is nowwhere in the sticker price…polution and foreign oil dependence. The social cost of a hybrid is less, but the sticker is not. It makes perfect sense to me for the public to subsidize this cost. But its not just me, the public voted for it. Giannoulias campaigned that he would do exactly this type of thing with the state’s money and he won convincingly. Good for him for keeping his promises.
Comment by dem Monday, Jul 16, 07 @ 2:07 pm
With hybrid sales flat or falling, incentives from the auto makers on the hoods of these hybrid cars, Giannoulais and his banker friends want to take your money and prop up the prices of these cars by $1000.
And those of you that do not think things through, cheer him on?
You people are a bunch of gullible citizens easily parted with your money. “Here - give me more taxes, and I will clean your air!”
“Giannoulais - where you always save more money!”
Comment by VanillaMan Monday, Jul 16, 07 @ 2:09 pm
This plan is about 1% as egregious as the state and federal subsidies for ethanol. Nice goal, dubious way to fund it. I agree energy efficiency subsidies should be made as equitable as possible (borrower v. cash customer, high MPG gas or diesel v. hybrid should not be a consideration), unless the secondary goal is to subsidize financial lenders or hybrid manufacturers in a bit of “social engineering”. And I think there will come a time when the feds (and maybe some of the states) are paying a bounty to get old gas guzzlers off the road. That would truly be a subsidy benefitting the working poor and helping the environment.
Comment by Six Degrees of Separation Monday, Jul 16, 07 @ 2:22 pm
Thank you YDD for starting to get to the meat of the issue.
Just what is being called a “hybrid”? Is it an Escape or similar vehicle that can burn E-85 as most Taurus’s have always been able to?
Or, is it a true hybrid. A gas/electric vehicle?
The devil is in the details. If it is just an E-85 burner, then this is a waste of money and it is only helping ethanol producers. Of course it is making grain, milk and meat more expensive. Not to mention the energy wasted producing ethanol.
This may be a zero sum game at best by promoting these hybrids, but not for ADM.
Comment by Papa Legba Monday, Jul 16, 07 @ 2:26 pm
Oh, and one other thing. A bounty to junk old gas guzzlers would supply plenty of scrap steel to build new energy efficient cars. Problem is, most of it would find its way into intermodal containers bound for the Far East and India. Scrap steel is about the only thing that makes a return journey in those containers these days.
Comment by Six Degrees of Separation Monday, Jul 16, 07 @ 2:28 pm
Cash is clearly not king in the State Treasurer’s plan.
One would think public policy should encourage staying out of debt.
Comment by Cal Skinner Monday, Jul 16, 07 @ 2:29 pm
Lots of folks with their undies in a knot today. Why don’t you figure out the tax subsidies given to ethanol-that’s something to really complain about.
As for AA-big props to Alexi for saving him a G on the price of a new hybrid Lexus.
Comment by Arthur Andersen Monday, Jul 16, 07 @ 2:49 pm
I believe a tax credit is available at the federal level for people that buy hybrids. A precedent of sorts has already been established.
Comment by Reality Monday, Jul 16, 07 @ 2:57 pm
In related news, Honda owner files class action suite claiming he was deceived about mileage claims: http://detnews.com/apps/pbcs.dll/article?AID=/20070706/AUTO01/707060350/1148
Comment by Rajah Monday, Jul 16, 07 @ 3:10 pm
The Illinois Constitution says nothing about hybrid cars a number of other issues on which politicians get off on tangents. Alexi needs to take more of a “bank teller” approach to the job and earn the best return for his investments. I think that we need to get back to basics and, for now, try to stay solvent. It’s not sexy but it is the role of state govt.
Comment by Tyler Monday, Jul 16, 07 @ 3:24 pm
When Alexi travels the state in his Ford Escape hybrid he will be getting worse gas mileage than my wife’s 98 Lincoln Town Car - unless of course, he defines the “state” the way big brother Rod does - Chicago city limits. Hybrids do not fare well at interstate speeds. Look at the mileage estimates. Highway mileage is much less than city. There is no green advantage to driving these things outside city limits.
Comment by sparky Monday, Jul 16, 07 @ 3:35 pm
I like Alexi, but hard-working taxpayers should not be subsidizing people’s car purchases. And no matter how you spin it, that’s what this is. Taxpayers are losing interest on state deposits to make a social/political statement.
Comment by Chicago guy Monday, Jul 16, 07 @ 3:45 pm
Hybrids are a bad idea. The cars are overpriced and the mileage requires you to break, alot
they generate power off of breaking, so on the highway your mileage is a lot worse. Also the break generators are a lot of fancy parts to wear out and break. So cost of repairs is up.
Hybrid owners report somthing like 33mpg on average. example http://www.wired.com/cars/energy/news/2004/05/63413
Just buy a diesel. We can make Bio diesel fuel out of vegetable oil and old cooking oil which McDonalds and others dump by the gallons. It can be made from soy and corn, and can be produced entiriely within the US if we had to. A Volkswagon Passat, far more comfrotable and substantial care if your in an accident, gets 40-45 MPG highway just by having a diesel. Not to mention the engine has lets parts then a gas engine and far less then a hybrid. Fewer thing to break, lower maintenance.
Alternatively, I would rather see a program like this to help low income families purchase relaible cars without having to go to pirate lenders just to get a inexpensive car. Lets support low interest loans for vehicles for the poor over new hybrids.
Comment by Ghost Monday, Jul 16, 07 @ 3:49 pm
Taxpayers who don’t want a hybrid are financing
those that want to get “free money” by buying
a car that the State deems “socially desireable”.
Comment by Esteban Monday, Jul 16, 07 @ 4:06 pm
If you really want to get mad, look at some of the federal subsidies for Peabody Energy, ADM, etc., as well as many contracts being given out to some less-than-reputable companies.
Peabody got in some hot, hot water for not paying their union workers prevailing wages. Yet I don’t remember the DOE or the Illinois Congressional Delegation threatening to pull their subsidies. I guess it really does depend on your side of the aisle. How about splitting it 50-50 and everyone being annoyed?
And let’s be honest, people. This is a drop in the bucket. The biggest complaint I heard about JBT was that she wasn’t creative and often times didn’t seem to care about the office. Alexi has taken a very pro-active approach to his office, and this is at least an inventive notion. And what if he does get an advantageous return on the interest? How many people will complain then?
Comment by Anonymous Monday, Jul 16, 07 @ 4:06 pm
Whoops! That last comment was supposed to be me. I had my cookies turned off.
Comment by Team Sleep Monday, Jul 16, 07 @ 4:08 pm
Wow what a bunch of comments. Let’s see squelch good ideas - its not in the constitution, big government, the “mob’s banker, subsidies of the middle class.
Hmmmmmm in the real world Alexi would be praised for being innovative and smart. Yeah he’s smart and innovative. Guess the others can go twiddle their thumbs over a budget and personality politics.
Doug Dobmeyer
Comment by Doug Dobmeyer Monday, Jul 16, 07 @ 4:21 pm
Team Sleep: “I had my cookies turned off.”
There seems to be a lot of people commenting here that have the same problem. . .
;-)
Comment by Ivote Monday, Jul 16, 07 @ 4:41 pm
Yeah, I hate when I do that.
Doug, I agree with you. Alexi beat Christine fair-and-square. He at least deserves for people to give him a chance. And the treasurer’s office is not an easy one to take away, so he can be in there for a while - if he so pleases.
Shouldn’t we all support some subsidies of the middle class? The middle class, as it were, pay a lot in taxes, are often saddled with credit card debt and ARMs, try to catch up with school loans and watch as our tax dollars go elsewhere. As my dad always said, “The crappy school my kids go to, the crappy roads I drive on and the crappy Social Security system that will probably never pay me what I paid into it is NOT worth the 40% of my paycheck the government takes from me.” Hmmm.
Comment by Team Sleep Monday, Jul 16, 07 @ 5:01 pm
normally the Treasurer’s office comes up with bad ideas but they actually work. there is no way that anyone will ever get this loan program to actually work. it’s way too complicated and to begin with you have to get your loan approved by a bank that wants to utilize the program. the issue is most banks don’t want to use any of the programs to begin with. i wonder if Alexi’s family bank used any of the programs before he was Treasurer. maybe he should have his friend Cong Jackson pass put forth some national legislation to further regulate emissions. the Boys Club of Cong Jackson, Alexi and Larry Rogers is all smoke and no fire. what ever happened to that 3rd airport.
they always start with promise and then do stuff just to make a headline. it’s not surprising that Ald Fiorette was a part of the press conference. give us a break or go find a pig to kiss, because this is only early campaigning bs
Comment by not on this one Monday, Jul 16, 07 @ 5:11 pm
This is just the tip of the iceberg! I’ve uncovered a vast democratic/communist plot that has been hidden in our government for too long.
It starts at birth when government incentivizes adoption and foster parenting instead of letting kids rot away in orphanages like they should! Then, unbelievably, state and federal governments will let parents save tax-free for college. Then they give students low interest loans. They even give you a huge tax break to buy your house. And don’t get me started on all the tax breaks you get for saving for retirement, giving to charity or spending on health care.
When will the government stop encouraging these devious behaviors like home ownership and retirement? Not any time soon if Alexi Giannoulias and his “Democrats” get their way!
***
At least Plutocrat was willing to ask some real questions instead of calling us sheep or free lunchers. For the record, if we’re spending $2.5 million to save about a million gallons of gas, I think that’s a good trade off. As for the accidents - if you’re concerned about highway safety, cutting the speed limit will do more to make our roads safer than discouraging small cars.
Comment by Underdog Monday, Jul 16, 07 @ 5:41 pm
I’d love to know how many of the people who write in for this idea work for the gummint. I worked for it for a long time and the most important thing I learned was: 9 out of 10 times, the gummint IS the problem, not the solution. How do you think farm subsidies started? Or go back and look at how medicaid started.
Comment by Mr. Wizard Monday, Jul 16, 07 @ 5:50 pm
here’s my two scents… The Treasurer is being very proactive which is more that what I can say about the rest of those fools (ie.. blago and friends). His Green Rewards program provides an alternative and has been endorsed by the green folks (ie.. Sierra Club) and the Mayor. I think those who take issue with a constitutional officer (Treasurer Giannoulias) who is actually doing something about key issues such as the environment instead of just talking about it are just ill-informed. Its the very reason we are in poor shape we are in as to the state budget… how about a realitycheck… Go Alexi!!!
Comment by realitycheck Monday, Jul 16, 07 @ 5:57 pm
YDD,
You’d better be careful.
Mike is not going to like you saying nice things about Alexi!
Comment by Bill Monday, Jul 16, 07 @ 6:07 pm
Most of the critiques here are reminding me of Radogno’s response to Giannoulias’ call for an audit of the 529 program “Why do we need to pay for an audit to tell us that a great program is working?” (or something to that effect).
Just as Judy’s 529 program turned out to be a joke, the fact that this state isn’t doing much to encourage us to save on fuel costs is a joke.
Treasurer Giannoulias’ program may be a small step, but it is a first step. Maybe it will help shape public opinion and consumer behavior. Maybe it will encourage American auto makers to offer more in hybrids. Maybe it will push Nissan — which doesn’t offer its only hybrid (the Altima hybrid) in Illinois — to do so.
As for the funding mechanism, it is a limited cost to the state, it is balanced by his innovative ideas on getting better rate of return on other investments, and it results in tangible consumer benefits (that will only increase in the long term, as the price of gas is never really going to go down significantly).
Given that we just learned we have the highest gas prices in the nation, we should be applauding the Treasurer and figuring out how we can encourage further environmentally responsible consumer behavior.
Comment by ?! Monday, Jul 16, 07 @ 6:24 pm
As I said, from what I understand, the federal government is already giving a tax credit; this program, on its face, seems to make sense, especially if you can get both the rebate and the tax credit. If he can legally do this through his office, fine. If it encourages him to come up with even more popular ideas, better still.
Comment by Reality Monday, Jul 16, 07 @ 6:35 pm
Ummm… Rebates for hybrids isn’t exactly a new idea. I seem to recall another candidate for Illinois Treasurer that had that same idea.
Comment by Squideshi Monday, Jul 16, 07 @ 6:42 pm
Is there anyone here who doesn’t think we are consuming too much oil?
Transportation accounts for 2/3 of America’s oil consumption. The Treasurer’s program is trying to cut into that. The only criticism here should be of the people who are attacking Giannoulias and the other public officials who are not making a move to take the next step (carpool lanes?)
Why does the funding mechanism bother so many people? Shouldn’t some value be assigned to the public goods provided here (not only the positive environmental effects but towards the national security goal of less reliance on foreign oil)?
This is a very laudable initiative, it comes at a low cost to the state, and potentially provides great incentive to those who have up to now have had not prioritized the environment to do so.
Comment by Hubbard's Peak Monday, Jul 16, 07 @ 6:42 pm
Its a good program. The technology and market for hybrids is already here. The only problem is the stubborn refusal of American car companies to give consumers what they’re asking for. We’re in a bizarre situation where its going to take government action to force American car companies to meet the demands of the marketplace.
Comment by Will Monday, Jul 16, 07 @ 6:54 pm
Illinois Constitution Article V, Sec. 18
” The Treasurer, in accordance with law, shall be
responsible for the safekeeping and investment of monies and
securities deposited with him, and for their disbursement
upon order of the Comptroller.”
Now can somebody tell me, where does it say anything about hybrid cars or similar schemes? Alexi needs to be more of a banker and less of a showboat. Sometimes sitting back and doing nothing is a good thing. Let the “invisible hand” of the marketplace give us hybrid cars and incentives to buy them!
I recently rented a Chevy Impala that ran “Flex Fuel”, that includes E-85. “Oh boy,” I thought, “I am helping the environment and getting great gas mileage” Problem: you cannot find E-85 in any gas stations.
Comment by tyler Monday, Jul 16, 07 @ 7:18 pm
Hubbard-
The $1000 is not likely to change anyone’s potential Hummer purchase to a Prius. Like I said before, it is a worthy goal, and a nice little incentive to maybe hasten a purchase that would probably be made anyway, or to switch a buyer of a high MPG gas or diesel burner to an equivalent MPG hybrid. I guarantee this is one small blip in what is already a wave of public energy investment in alternative technologies, both good (electric, hydrogen), fair (current hybrid technology) and highly questionable (ethanol, coal-to-liquids). As a taxpayer and potential customer, I’d like the incentive availabe if I paid ca$h or if I wanted to buy a high MPG gas or diesel…it should be about results, period where improving the environment is concerned.
My dream green vehicle would be a medium-sized pick-up truck built on the upcoming Chevrolet Volt plug-in hybrid chassis. Hope the incentive is still available in 2010.
Comment by Six Degrees of Separation Monday, Jul 16, 07 @ 7:32 pm
Perhaps, an undershirt would help.
Comment by Shelbyville Monday, Jul 16, 07 @ 7:58 pm
I’m sure the workers at the Chrysler plant in Belvidere are happy he wants to offer rebates for competing cars not made in Illinois.
Comment by Anonymous Monday, Jul 16, 07 @ 8:09 pm
Maybe Jesse White can get in on this - Issue license plates at half price if you agree to drive at or below 55 MPH. They could be a distinctive color so the cops would know to ticket you if you went TOO faaaaast.
Comment by A Citizen Monday, Jul 16, 07 @ 8:18 pm
Bill, shouldn’t you be fanning the Governor or something?
Comment by Arthur Andersen Monday, Jul 16, 07 @ 8:37 pm
That’s how the discussion should go. I believe that spending 3.00 to save a gallon of gas is the wrong way to go. Lets get it out on the table and see if there is a more effective way to use the money. In this case there are only 2,000 direct beneficiaries.
If we subsidize everyone for everything, where will the money come from? At some point even the smokers will give up their habit and where will the replacement dollars come from on the programs supported by that resource.
As far as small cars physics dictates the smaller car will undergo a more violent event in a collision than a larger vehicle. Air bags and seat belts help, but there is a limit. As long as we have 80,000lb trucks out there, I’m staying in my 4000lb vehicle.
People are funny about fuel consumption. I still see people driving their vehicles over 80 mph when we all know that you burn 20-30% more fuel at that speed. In fact I recently saw a municipal vehicle in a public parking lot idling unattended for more than 20 minutes.
Comment by plutocrat03 Monday, Jul 16, 07 @ 9:36 pm
What the state REALLY needs to do is adopt Calfornia car emission standards (…most recently announced by two Republican governors in Florida this past week - Schwartzenegger and Crist). It would get us cars that are CLEANER (when at least 2/3 of IL residents still live in areas that don’t meet current air quality health standards, and USEPA just suggested that tighter standards to protect public health are needed, finally outing more metro areas in IL with unhealthy air), HIGHER MILEAGE (meaning less long term out of pocket gas costs- especially as costs continue to increase because of Chinese demand, less money to unstable/unfriendly nations), and LESS GLOBAL WARMING POLLUTION (smile if you like the idea of most of Illinois looking like the Texas panhandle weather wise within the next 70-80 years, especially for those of you with kids or grandkids)
Creative hybrid subsidies are a step in the right direction for cleaner air, but we have a long way to go. Funny how the Republicans are getting a clue that T. Roosevelt didn’t mess around when it came to environmental issues hundred years ago. Nice to see some Democrats have a clue that its important and worth fighting for too.
Comment by clean air guy Monday, Jul 16, 07 @ 10:15 pm
TYLER - Please tell me where in the Constitution it says the Treasurer shall be responsible for “Bright Start” college savings program?
Again, Republicans on the rampage about putting tax dollars back in the pockets of taxpayers.
I guess they’re only happy when our tax dollars or winding up in the pockets of corporations with armies of lobbyists.
SPARKY - Just for debunking kicks, I can’t find anyone who claims that a 1998 Lincoln Town Car gets better than 18/24 MPG, yet Sparky claims his gets better than a Ford Escape Hybrid, which the EPA estimates gets 30/34.
Note to Republicans: We CAN read, and use Google efficiently.
Comment by Yellow Dog Democrat Monday, Jul 16, 07 @ 10:45 pm
P.S. Less you think I’m really a closet Greenie, I wrote a long time ago about the E-85/Ethanol scam, fueled by Consumer Reports.
You can read The Ethanol Myth here.
Comment by Yellow Dog Democrat Monday, Jul 16, 07 @ 10:49 pm
Or, perhaps here.
Comment by Yellow Dog Democrat Monday, Jul 16, 07 @ 10:50 pm
Why does the government issist on telling us what is good for us. No thanks, I like my big engine just fine.
Comment by The Conservative Tuesday, Jul 17, 07 @ 12:27 am
is his bank involved?
Comment by po'd Tuesday, Jul 17, 07 @ 1:21 am