Seeking to rectify an embarrassing and expensive mistake, the Arizona legislature met in special session in October to call to a halt an alternative-fuel tax-incentive program it had approved only five months earlier.
The cost of the credit and grant program, originally estimated to be about $3 million, soared to $483 million as more than 20,000 Arizonans ap-plied for state subsidies on expensive vehicles that could run on cleaner-burning fuel. The added cost turned the program into what Governor Jane Hull called "the state's sixth-largest agency." Hull hopes to spread the payments out over several years, but belt- tightening for other programs is inevitable.
The bill was pushed by House Speaker Jeff Groscost. In November, Groscost lost his bid for the state Senate, costing the GOP control of the chamber, and resigned the speakership the next day. The program is now under criminal investigation. Groscost had leased a truck from AZ Star Alternative Fuels, whose owner, Nathan Learner, helped draft the subsidy legislation. Groscost and Learner last year lobbied the U.S. Environmental Protection Agency to delay a planned moratorium on converting sport-utility and many other vehicles to run on propane or natural gas.
Groscost's bill was full of loopholes. Perhaps the most serious legislative error was the deletion of a word that would have limited the program to 1 percent of new vehicles registered in the state. Instead, 1 percent of all vehicles became eligible.
"If you look, in hindsight, at the rules that they changed, a child could figure out that this wasn't going to be 3 million bucks," said Rob Melnick, director of Arizona State University's Morrison Institute for Public Policy. "It happened because it was pushed through at the last minute."