Pa. taking baby steps away from gas tax
State may be ready to try fee for miles driven
Following a slowly growing national movement, Pennsylvania may be ready to try the idea of charging drivers a mileage-based fee to make up millions in transportation revenue lost to more fuel-efficient hybrid and electric cars.
Melissa J. Batula, the Pennsylvania Department of Transportation’s acting executive deputy secretary, said the department is working with the General Assembly to draft legislation establishing fees for those who pay little or nothing toward road maintenance. That’s because the state gets about 75% of its roadmoney from the gasoline tax.
A commission appointed last year by Gov. Tom Wolf recommendeda series of steps to phase out reliance on the gasoline tax, including creating a method for hybrid and electric vehicle owners to help payfor transportation costs.
“There’s still a lot to figure out,” said Ms. Batula, adding that she is optimistic a bill can be introduced bythe end of summer.
Oregon has had a voluntary programsince 2015; Utah started a similar one in 2018 and Virginia followed in 2019. The federal infrastructure bill includes money for a national pilot program, but nothing hasbeen established yet.
The problem is that states that rely on gasoline taxes for transportation funding have seen that money stagnate or in some cases decrease because of more fuel-efficient vehiclesand the growing popularity of electric vehicles.
With the pandemic keeping some drivers home and the Biden administration’s multibillion-dollar push to increase charging stations to grow the number of electric vehicles, the problemis only going to get worse.
In Pennsylvania, the Wolf administration last year set a goal of phasing out the gasoline tax — among the highest in the country at 57.6 cents a gallon — and replacing it with a mileage-based fee. The state spends about $6.9 billion a year on roads and bridges, but it says it shouldspend $15 billion.
To start the process, the state is considering a two-option program for hybrid or electric vehicle owners: a flat annual fee or a fee based onactual miles driven for those who don’t drive as much. The mileage fee for a year could be no higher thanthe annual fee.
The department and legislators are looking at a number of factors to determine what a fair fee would be,
Ms.Batula said.
For example, PennDOT research has determined that the average passenger vehicle driver pays 2.9 cents per mile in gas taxes, compared to 0.7 cents for hybrid drivers and nothing for electric vehicle operators. Additionally, the median amount of miles driven by passenger vehicles is about 9,000 a year, but about 25% of drivers travel morethan 14,000 miles a year.
Using those figures, a gasolinepowered vehicle that travels 14,000 miles a year generates roughly $400 ayear in gas taxes.
In setting a comparable fee for
“You certainly don’t want to punish people who drive EVs or hybrids [by making them pay too much] because that’s a good thing they are doing overall.”
— Melissa J. Batula, Pennsylvania Department of Transportation acting executive deputy secretary
driving a hybrid or electric vehicle 14,000 miles a year, the state may want to set the flat fee a little higher than $400 to capture the right payment from those who drive the most, Ms. Batula said. Anyone who drives less could choose the mileagebased fee to avoid paying morethan their fair share.
“I think it’s going to be interesting to see how they set that fee,” Ms. Batula said. “You certainly don’t want to punish people who drive EVs or hybrids [by making them pay too much] because that’s a good thing they are doing overall.”
The state also will have to determine how to collect mileage information. Other states have used a variety of methods, including an annual tally at vehicle inspections or registrations. Or it could be a GPS to track a vehicle or an odometer device that works like E-ZPass, in which an account is attached to a credit card to be replenishedas the miles add up.
Some of that sounds like “big brother” government watching where people drive, but a recent report by The Eastern Transportation Coalition determined that is a myth, said Executive Director
Patricia Hendren. The coalition includes 17 states along the East Coast and the Districtof Columbia.
A coalition study gave devices to rural, suburban and urban drivers in Pennsylvania, Delaware, New Jersey and North Carolina to determine how many miles they drive and what a mileage fee might charge them. The study found drivers became more comfortable with the device the longer they used it and realized it was only recording how many miles driven, not where they were going.
Ms. Hendren said educating the public will be the key to building acceptance for a mileage-based system. The groupis beginning the fourth offive studies on the process.
Oregon created a voluntary program in 2015 called the OReGO Road Usage Charge in which drivers can pay a per-mile fee instead of the state’s fuel tax. In 2020 it set up a program for owners of electric or high-mileage vehiclesto pay a reduced fee.
The program had 799 participants with more than 2,100 vehicles enrolled trough April and has been working well, said Michelle Godfrey, spokeswoman for the Oregon Department of MotorVehicles.
“It’s not very many people, but I don’t know that we expected a lot of people to volunteer to pay a tax, ” Ms. Godfrey said. “We have demonstrated for seven yearsthat this can work.
“It’s kind of a big jump from 799 to 7 million, but we’re confident we can do it. It’s going to take the political will to push the switch [to a complete mileage-based system].”
Virginia set up a highway user fee in 2020 that charges motorists based on the type of vehicle they drive; the state figured the average motorist drove 11,600 miles a year. Beginning July 1, the state will offer motorists who drive fewer than 11,600 miles a year the chance to paya mileage fee.
Utah set up a voluntary road usage charge in 2018 for hybrid and electric vehicle owners;it charges 1.52 cents a mile with a cap of $123 a year forelectric vehicles, $53.25 for plug-in hybrids and $20.50 for gasolinehybrids.
In Pennsylvania, Ms. Batula acknowledged that the fees for electric and hybrid vehicles likely would generateonly a few million dollars initially, nowhere near the shortfall for roads and bridges. But it’s an importantstep, she said.
“It’s going to take a long time to get [the switch to mileage-based fees] in place,” she said. “But I think it’s it’s important to start.
“It will help to keep us at pace with what we have now. We don’t want to fall furtherbehind.”