The owners of electric vehicles face expensive speed bumps as an increasing number of states tack on costly registration fees to recoup lost gas tax revenue.
Critics say the annual expense unfairly punishes climate-conscious drivers who want to save on fuel. Proponents in mostly Republican-led states say the tax is vital to fund roads and bridges.
With internal combustion engines increasingly going farther on every gallon of gas, all-electric vehicles have worsened an issue in the making for years.
State fuel taxes made up 38.4% of states’ transportation budgets last year, down from 41.1% in 2018, according to the National Association of State Budget Officers. States are projected to lose up to $87 billion by 2050 as fuel efficiency improves and more drivers go green.
At least 32 states require an annual fee on top of regular registration costs for EVs, and 19 of them also have plug-in hybrid fees, according to the nonpartisan National Conference of State Legislatures.
The additional EV fees range from $50 in Colorado, South Dakota and Hawaii to $225 in Washington state. Seven states have $200 EV fees: Alabama, Arkansas, Ohio, Georgia, Texas, West Virginia and Wyoming.
The extra costs for plug-in hybrids vary by state. Most are roughly half of the EV fee.
Florida does not have such fees, but state Republicans want that to change.
More states face transportation budget problems, but EV advocates say the transition to green energy is not to blame. They say EVs represent a drop in the bucket of decreased gas tax revenue.
EVs accounted for 7.9% of all new auto sales in the third quarter, up from 6.1% at the same time last year, according to Cox Automotive.
“The EVs are a rounding error by comparison,” said Max Baumhefner, a senior attorney at the Natural Resources Defense Council.
Still, that number could radically expand.
The Biden administration is weighing a tailpipe emissions rule that would force automakers to drastically increase EV sales to as much as two-thirds of their new vehicle market share by 2032.
Environmental groups and state Democratic lawmakers say the “punitive” annual registration fees are overpriced and won’t dent revenue problems. Instead, they say, the added costs are conservative ploys to pump the brakes on green energy.
“It’s shortsighted and punishes people for not just buying the cleanest vehicles on the road but buying vehicles that can save them money,” Mr. Baumhefner said.
A Consumer Reports study from last year found that annual fees of $200 or higher would be nearly three times as much as the average gas tax revenue collected through a new gas-powered vehicle.
Lawmakers in Texas arrived at their $200 fee after a 2020 analysis by several state agencies estimated the yearly per-vehicle loss in gas tax revenue at $100 for the state and $95 for the federal government. New EV buyers in the state must pay a one-time $400 fee.
Mr. Baumhefner said the leading causes of lower gas tax revenue are inflation, an 18.4-cent-per-gallon federal tax that hasn’t increased in 30 years, and less fuel use because of improved efficiency and fewer daily work commutes since the onset of the pandemic. The average state per-gallon gas tax rate was 27.1 cents as of July, according to the U.S. Energy Information Administration.
The Natural Resources Defense Council, other environmental organizations and Democratic officials in some states have advocated for a yearly fee indexed to inflation based on vehicle efficiency and miles driven.
“It’s future-proofed instead of having a stupid fee that’s an artifact of compromise between legislators behind closed doors that’s an arbitrary number,” Mr. Baumhefner said.
Ohio Rep. Joe Miller, a Democrat, has lobbied his colleagues in Columbus for years to drop the state’s $200 EV fee and $100 hybrid fee to $100 and $50, respectively. He described the current rate structure as a “Band-Aid” for a broader transportation funding problem that will grow as gas-powered vehicles get kicked to the curb.
“It’s not a true solution for how we can adequately and fairly fund our roads and bridges,” Mr. Miller said. “We’re heading into a newer phase of energy production for our mobile transportation. We’re going to have to completely restructure and rethink how we set up our revenue stream.”
• Ramsey Touchberry can be reached at rtouchberry@washingtontimes.com.
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