America’s current system, in which gas taxes partially pay for roads and other vehicle infrastructure projects, obviously can’t survive in a world where everyone drives an electric vehicle. There is no single, obviously best solution to modernize the situation, but in Texas, the issue has resulted in some Republicans coming out in favor of tax hikes.
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The bill being discussed in the Texas state senate—Senate Bill 1728—would raise fees on EV owners as a way to make up for the gas tax they’re not paying. The legislation would require an annual EV fee of between $190 and $240, an additional fee of over $150 for anyone who drives their EV more than 9000 miles a year, and an annual surcharge of $10 to fund a charging infrastructure advisory council.
Texas, which couches these fees in “equalization for road use consumption for alternatively fueled vehicles” terminology, said the fees would apply to approximately 300,000 vehicles and raise around $37.8 million for the State Highway Fund (SHF) in fiscal year 2022, climbing to $135,594,000 in fiscal year 2026. If passed, the bill would take effect on September 1, 2021.
Texas is not the first state to look at charging electric vehicle drivers a fee as a replacement for gas taxes, but its numbers appear out of line with the gas tax most people pay. Electric-vehicle advocacy group Plug In America (PIA) noted in a white paper published in August 2020 that the national average in annual gas taxes for a light-duty vehicle is $73. PIA also found 20 states that have some sort of EV registration fee, with prices ranging from $50 to $200.
In other words, in many cases, EV drivers would be asked to pay more to support vehicle infrastructure than drivers of fossil-fuel vehicles. “Policymakers need to realize that until EVs reach a certain threshold of all light-duty vehicles on the road in a state, they shouldn’t be incentivized on the one hand and punished on the other,” PIA writes.
The Texas Commission on Environmental Quality did have an incentive program for people to buy or lease clean-air vehicles (including EVs, hydrogen, and CNG/LPG), but that program has ended. During the 16 months between September 2019 and January 2021, the state gave out incentives for 1371 EVs and 10 CNG/LPG vehicles. Some local incentives remain available, including an EV charging program in Austin.
Tesla, of course, is building a large factory near Austin called Gigafactory Texas that’s scheduled to start operating by the end of 2021. Local Tesla and EV fans in the state are decrying the fees that SB 1728 would introduce and have sent out a call to action asking people to ask their state senators to vote no on SB 1728 as a way to vote “FOR thriving jobs and clean trucks and cars made in Texas!”
Instead of annual EV fees, which don’t take actual road usage into account, PIA and other EV advocates support what are called road usage charge programs, or ways to charge people for the actual miles they drive each year, often factoring in the weight of the vehicle.
Seven states are conducting road usage charge tests with help from the U.S. Department of Transportation. Another group, Road Use Charge West, is made up of 17 western states that have either enacted RUC policy, have pilot programs in place, or are researching if an RUC will work for them.
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