Carpe Diem

‘Going green’ with all-electric and highly fuel-efficient vehicles creates challenges as revenues from gas taxes decline

Editorial from The Olympian (WA):

As state lawmakers begin gathering in Olympia for Monday’s start to the 2013 legislative session, the never-ending quest for new revenue that isn’t-a-tax-increase will continue. That should be sufficient motivation for the Legislature to consider applying the gasoline tax more fairly, but it means going down a tricky road full of potholes and warning signs.

As more and more people are turning to all-electric and highly fuel-efficient vehicles, there is a corresponding decline in gas tax revenue. And this creates a conundrum for the state Department of Transportation: how to pay for upgrading and maintaining our roadways.

Revenue from Washington’s 37.5 cents per gallon gas tax generates the largest portion of transportation funds, but only 8 cents of the revenue goes to funding repairs and maintenance, safety improvements on both highways and ferries, and congestion relief projects.

The Legislature started to address this problem in the last session with HB 2660, which imposes an annual electric vehicle fee of $100. Starting Feb. 1, owners of the Nissan Leaf, Tesla Roadsters and certain modified all-electric vehicles will pay the fee when they renew their vehicle registration.

That’s a good start, but it doesn’t address the loss of gas tax revenue as the number of vehicles getting 40, 50 and more miles per gallon increases. Highly fuel-efficient vehicles don’t cause any less wear and tear on state roads. The need to repair and maintain roadways will remain the same, and will likely increase with population gains and the ongoing need to construct improved commercial shipping corridors to support regional employers.

Bottom line: Looks like owners of all-electric and highly fuel-efficient vehicles aren’t paying their “fair share” of taxes for road repairs.

HT: Dallas Walton

17 thoughts on “‘Going green’ with all-electric and highly fuel-efficient vehicles creates challenges as revenues from gas taxes decline

  1. I can buy the fall in tax revenue being due to people driving less because of high gas prices and the recsession before I can buy that it’s due to electric cars and hybrids…

    • moe-

      i think even more of it has to do with cars simply getting better mileage.

      30 mpg used to be great mileage for an econo car. now it’s 40-50.

      my new SUV gets the same mileage as my old one despite having twice the horsepower. i am getting around 19 mph highway which is astounding for a 555hp vehicle. even the supercars of today with 600+ hp get astounding mileage. the new mclaren gets 24mpg highway. compare this to the signle digit mileage of cars from the 80′s and 90′s and it’s truly amazing. HP/cl is through the roof and better fuel injection and electronic engine management are making massive strides. i

      the average mpg of a vehicle sold in the us is up almost 10% since 2008. it is currently around 22.7 up from 20.7 in 2008.

      that is going to have a big effect on fuel usage.

        • I think that is going to be the wave of the future, Citizen. Here in New Hampshire, our vehicle excise tax is based in a similar manner.

          • Jon, how do the guvmint people keep track of just New Hampshire miles driven? Transponders in your vehicle? I think that is what will happen in Washington state.

          • No. You need to register your vehicle every year. When you initially register your vehicle, you pay a certain fee based on the year of the car (the newer the car, the higher the fee. The idea being that a new car will do more damage going forward. For an older car, the damage is done).

            When you inspect your car every year, they record the mileage. If your mileage is low, you can ask the state for a waiver on the fee. If your claim is good, it is very rare the waiver is not granted. They’d just charge you a fee based on mileage driven between your last inspection and this one.

      • Absolutely.

        I’m now getting 54 or so on average, traded in my Audi A6 for a basic Prius at end of last year (and took a lot a razzing for it). I miss the Audi a lot, don’t miss the $$$ spent on gas…$30 a month now.

        • of course, the other way to do this is to tax tires instead of gasoline. tires wear out in direct relation to miles driven.

          take the expected mileage of the tires and charge some fee per mile.

          i suspect many states may try to go transponder, but this is expensive, has real issues with the legacy fleet, and personally, i see it as an invasion of privacy.

          seems like you could be tracked that way.

          • seems like you could be tracked that way.

            No s**t!

            Of course if you aren’t doing anything wrong, you have nothing to fear from big Brother. (/sarc)

            Since I am now unable to disable 911 GPS on my smartphone, I’m considering using something like this when I don’t need navigation.

    • why would we want to tax people who work from home?

      they are not contributing to the wear and tear of the roads, commuters are.

      that seems like the opposite of user pays.

        • ahh, sorry.

          sarcasm does not always come through well in web posts.

          of course, we do that exact thing here in park city.

          if you live here year round, you only have to pay half your property tax. if you own a vacation home (as many folks do) you pay the full amount.

          thus, our schools etc are more heavily paid for by folks who do not use them.

          oh, you can’t vote here? pay up.

          • The State is the great fiction through which everyone endeavours to live at the expense of everyone else.

            Bastiat

  2. Rufus

    Maybe we need to start taxing people who work from home, or those who ride public transportation to cover the revenue gap?

    Sure, why not? Taxing people for things they don’t do worked with healthcare, no reason to believe it wouldn’t work with transportation.

  3. People are not increasing their driving. FHWA estimated 2004 vehicle miles traveled are sligtly higher than 2012. May be not having the steady revenue increase is part of the signal that we don’t need to build as many new roads and streets. Times change.

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