New Electric Vehicle Fees Will Help Fund Roadwork
Starting this month, electric vehicle owners will begin paying an annual fee of $100 to help raise revenue for road infrastructure. The Road Repair and Accountability Act of 2017 authorized the new fee, which will be added to an EV owner’s standard registration fee. Roadwork is mostly funded by gasoline excise taxes. EV owners don’t purchase gasoline, but they do use our roads, and the new fee is designed to distribute the maintenance burden more fairly. California is transitioning to EVS rapidly, and the diminishing revenue from the reduced sale of gasoline has to be addressed. The law is already on the books, and it makes sense. Many other states have adopted similar fees, and $100 is not out of line with what other states are charging.
The 2017 legislation directed the U.C. Davis Institute of Transportation Studies to analyze these issues, and people who care about climate change should consider their findings thoughtfully. The researchers make a strong case that the new $100 fee will be unsustainable. As EVS proliferate, green drivers will need to contribute even more. An efficient gas burner that gets 32 miles to the gallon and drives 12,000 miles in a year pays about $250 in federal and state gasoline taxes, so EV owners actually get off pretty easily. If all goes well, California will have 5 million EVS on the road by 2030. The Davis study estimates that annual revenue for road infrastructure will decrease by five hundred million dollars due to the drop in gasoline sales unless the EV fee is increased.
Many greens are worried that the new fee will reduce the sale of EVS. The Davis researchers looked at this carefully, and they estimate that EV sales might be hampered anywhere from ten to twenty percent “in the short run”. The sales reductions appear to be greater when the fees are enacted into law than they are when the fees are imposed. It’s a shame that consumers who care about the planet enough to consider purchasing an EV place so much weight on such a small annual fee. California’s Clean Vehicle Rebate Program offers a $2,000 incentive. Add that to a $7,500 boost from the feds and you have enough government money to pay your road maintenance fee for 95 years.
The Davis study highlights another attribute of the flat $100 fee that is somewhat unfair. The annual levy charges all EV owners the same amount whether they drive a little or a lot. The gasoline tax is considered more equitable because it conforms to the “user pays” principle. The more you use the roads, the more gasoline you buy. The researchers believe that it is feasible to implement anevroadtaxthatisbasedon the number of miles driven. Their “road use charge” scenario would improve fairness and could be scaled to eliminate the revenue shortfall associated with the inadequate flat fee.
If we are to win the battle against climate change, it is imperative that we continue to address these kinds of fairness issues amicably. The 2017 infrastructure legislation increased gasoline taxes, and EV drivers should now feel better about their own modest contributions. The electrification of the transportation sector will fail if we can’t maintain our roads. We also need to maintain a spirit of goodwill as we encourage other drivers to go green.