Why not drop e-bike rebates to $0?

Draft language in the legislature’s transportation spending bill would drop the maximum e-bike rebate from $1,500 to $750. Quick question: why not $0?

The draft language, according to Axios Twin Cities, would cap rebates at $750 and reserve them entirely for married couples making under $78,000 and singles making $41,000 or less. The remaining $2.2 million in rebate money “would be distributed via lottery, not a first-come, first-served application, if demand again exceeds available cash.”

The pilot program, passed in 2023, took taxpayers on a ride by allowing rebates up to $1,500 to cover between 50 percent and 75 percent of the value of an e-bike. The original law had mandated that 40 percent of recipients earn less than $78,000 per household and less than $41,000 for an individual.  

A year ago today, coincidentally, American Experiment’s Tom Steward reported on the disastrous breakdown of the Department of Revenue’s website to apply for the rebates:

You’d think state government techies and their overly compensated superiors would learn by now, but no such luck. The much-hyped unveiling of the Minnesota Department of Revenue website to apply for an up-to-$1,500 taxpayer-funded rebate for buying an e-bike crashed and burned within minutes of going live Wednesday morning. The outage prompted this notice, postponing the state giveaway indefinitely.

e-Bike Rebate Application — Launch Postponed due to Technical Issues
The e-Bike Rebate application will not be available today (June 5) due to technical issues. We’re working with our external technology vendors to understand and resolve these issues. We’ll provide more information when available. We apologize for the inconvenience. 

The embarrassing episode immediately thrusts the e-bike online meltdown into the hall of shame of rollouts of highly touted state government websites that failed spectacularly despite all the fanfare. 

The policy document for the agreement reads simply: “Revises eligibility, amount, and allocation process for the electric-assisted bicycle rebate.” The agreement “dropped” a provision to require “a report from the Department of Revenue on the operation” of the program. There’s nothing like spending money without any accountability for outcomes.

The transportation bill has also modified original plans for a $200 electric vehicle surcharge and is now “based on the value of the vehicle and the age of the vehicle,” with EVs and plug-in hybrids to have different annual fees. Electric vehicles pay $75 in lieu of paying gasoline taxes, despite imposing more wear and tear on roads and bridges due to their greater weight. American Experiment Economist John Phelan estimated in July 2024 that the “average Minnesotan motorist pays $194 in gas tax annually (681.1 x 0.285 = 194), more than double what an EV driver pays in lieu.” Minnesota has since increased its gas tax to $0.319 per gallon. (The bill does impose “a per kilowatt hour fee on public EV charging station use and directs a working group,” though the vast majority of EV drivers charge at home).

Subsidizing e-bikes, whether a “popular” program or not, is just another way of “funneling taxpayer dollars into pet projects.” Treating EVs preferentially is another. With ongoing budget negotiations and lawmakers looking for palatable ways to belt-tighten, why not start here?