For decades, every American driver paying to fill the tank on a gas-guzzling SUV or even a fuel-efficient hybrid electric car has simultaneously helped pay for the roads they drive on, too. Fuel taxes, paid at the pump, are collected by both the federal and state government, to use those funds for roadway construction, maintenance and repairs.
But as the nation plugs into the electric vehicle (EV) revolution, we’re headed for an inevitable roadblock: dwindling fuel tax collections to cover the cost of the roads we drive on. In 2021, the Congressional Budget Office estimated that the current 18.4-cent per gallon federal tax (which hasn’t changed in 30 years) isn’t keeping pace with infrastructure spending at the average projected inflation rate. It’s important to note that fuel taxes are charged at a fixed 18 cents per gallon at the federal level (Florida adds another 35 cents per gallon), so higher gas prices have no impact on tax collections. At current trends, the federal Highway Trust Fund will face a staggering $140 billion deficit by 2031.
That’s the problem at the federal level. But Florida finds itself in a particularly tight pickle, with relatively high gasoline taxes (16th in the nation), and the 2nd highest number of registered electric vehicles in the country. In other words, we depend heavily on gasoline taxes for our roadways, and we’re missing out on that gasoline tax revenue because of our rapidly growing EV population. It doesn’t take a an electrical engineering degree to understand that if don’t do something about revenue shift away from fossil fuels, there won’t be any money to pay for the roads that EV owners drive on.
Don’t worry, though, because politicians have plenty of ideas to solve this problem for us. Like the one the Florida Senate passed unanimously on Friday.
Surprisingly, there were no sparks to ignite serious debate on Senate Bill 1070, which amends current vehicle registration statutes and, if passed by the Florida House and signed into law by Governor Ron DeSantis, will require all owners of EV’s and Plug-in Hybrid Electric Vehicles (PHEV’s) to pay a hefty new registration fee: $200 for EV’s and $50 PHEV’s, and that’s on top of vehicle registration fees owners already pay for vehicle registration and license tags.
On the Senate floor, the bill was even acknowledged as a “tax” by Democrat Senator Tina Polsky when she tried to offer an amendment that would have diverted some of the funds to help pay for more electric vehicle chargers. While that amendment failed, Polsky’s argument got to the heart of the problem.
“In addition to being one of the highest fees charged in the country,” she noted on the Senate floor, “this fee is significantly higher than the average amount of state gas taxes paid by the average Florida driver which is roughly $125.”
While Polsky’s amendment failed, the bill itself passed 39-0 in the Senate.
While not a single Republican bristled at the notion of raising taxes on EV drivers, that doesn’t mean the vote went unnoticed.
“Lawmakers should tap the brakes on any proposal to enact a punitive tax on electric vehicle owners,” says George Riley, Florida Director of Conservatives for Clean Energy. “The current legislation would end up creating one of the highest electric vehicle taxes in the country, which would disproportionately impact Florida residents.”
But the bill’s sponsor, Senator Ed Hooper, argued on the Senate floor the time had come to raise taxes on electric vehicles.
“It’s been said, Madam President, that there is no free ride,” Hooper argued, addressing Senate President Kathleen Passidomo, “Well if you own an EV vehicle, you’ve been riding free since the day you bought it.”
The Florida House has yet to weigh in on the matter, and if the past has been any guide, Republicans there aren’t about to vote in favor of raising taxes on anyone or anything. If they do, though, they can expect to hear about it during the 2024 election cycle. But we can let Florida’s political consultants and their respective candidates and campaigns argue about whether or not new a new fee should be considered a tax.
In the meantime, there’s the question of what’s the best way to actually solve the problem. One of the main complaints about a $200 flat fee is the lack of proportionality in terms of the actual cost recovery compared to the number of miles driven. While a fuel tax is collected based on how much fuel is purchased – and can be somewhat accurately correlated with the number of miles driven – a flat registration fee doesn’t take into account the differences in vehicle usage among EV owners. For instance, an EV owner who only runs errands and drives a few thousand miles per year would pay the same amount as, say, a commercial EV operator who drives tens of thousands of miles annually. Not only is the fee unfair in that regard, it doesn’t accurately reflect the commensurate wear and tear each vehicle causes to public roads and infrastructure.
But what are the alternatives? One idea being floated is a per-mile taxation system, which would charge vehicle owners based on the number of miles driven. This method aims to create a more equitable system by ensuring that those who drive more, and therefore contribute more to the wear and tear of public roads, pay a higher tax.
While per-mile taxation is the fairest and most accurate way to recapture the cost of wear and tear based on each vehicle’s impact on the roadways, the next question is how government would collect the information. While GPS tracking systems would could easily capture the information automatically and reduce administrative overhead, privacy advocates say GPS data collection by government is a non-starter.
At the other end of the spectrum is the relatively simple annual odometer reading. EV owners could report their annual mileage themselves. The issue of underreported mileage would eventually catch up with any dishonest owners when they go to dispose the vehicle through a sale or trade-in. Any untaxed mileage on the odometer would reflect a balance due by the seller. But odometer readings don’t say where a vehicle has traveled. How many of those miles driven were on Florida roads versus, say, Georgia, Alabama, or any other state?
The bottom line is that there’s no perfect solution for the growing challenge of finding ways to pay for transportation infrastructure when those costs used to be paid for through gasoline taxes. As Florida continues to transition out of the fossil-fuel era and into the EV era, our lawmakers are going to have to find ways to innovate, too. But the flat tax proposed by the Florida Senate is as unimaginative as it is unfair.
If leftists are pissed it must be the right thing to do.
“Cash, Grass or A**, Nobody Rides For Free” is what was the buzz word whilst hitchhiking many mango seasons ago.
Interesting fact that every travel period the gas goes up and slowly lowers after any traveling holiday! We The People gouged again and again with the governments approval???
Why not charge $200? It’s a one-time fee/tax that equates to < 2 years of the comp gas cars. Majority of EV owners still getting a break.
EV drivers should be taxed by weight since their excessive weight breaks down the road surfaces faster.
Technology has changed the tax Paradyme. As roads and bridges decay, the federal government will increase road taxes too. They might divert the money to pay for some progressive favorite project, but they will raise taxes. Here in Florida, we are only asking drivers to pay their fair share. Everyone driving anything over a state road needs to pay for that privilege. Some of the money the plug-ins save on gas can go to the $200.00 fee!
I love it when those anti-tax Republicans raise taxes.