Roadwork funding is running out of gas. The gasoline tax — which is how most states pay for roads and bridges — has seen its revenue dwindle after automakers spent decades improving vehicle mileage. Electric vehicles promise to send that trend into overdrive. As I report today, many states have responded to the revenue shortfall by charging new fees on EVs. The idea is to make EVs “pay their fair share” because right now “the rest of us subsidize their use of our roads,” said Pennsylvania state Rep. Ed Neilson, the Democratic chair of the state’s House Transportation Committee. Thirty-nine states now charge some kind of yearly fee for hybrids or EVs. They range from West Virginia and Mississippi, where plug-in vehicles are sparse, to California and Oregon, where strong climate policies otherwise encourage EV adoption. The push-and-pull between climate and budget goals has left 13 states with policies that offer drivers rebates to buy an EV, before charging them extra for that purchase. The effect, some warn, could be like pressing the accelerator and the brakes at the same time: lots of sound and friction, only to stay in the same place. Charging EV owners a fee is “more of an anti-electric vehicle policy than a road funding policy,” said Minnesota state Rep. Frank Hornstein, the Democratic chair of the state House Transportation Finance and Policy Committee. One alternative policy could replace the size and reach of the gas tax, my colleague Alexander Nieves reports today. But it’s proven to be a political nightmare. Charging drivers by the mile — sometimes called a road user fee — could raise enough money to replace gas taxes. The problem is how to administer it. “It's hard for me to envision a smooth transition to a system where Californians get a bill in the mail that says, 'You drove 1,400 miles last month, you owe 140 bucks,'” said state Sen. Josh Newman, a Democrat who reclaimed his seat in 2020 after a recall campaign ousted him for voting to raise the gas tax. “People would lose their minds.” A diverse mix of states has experimented with that policy, with voluntary pilot programs starting in Utah, Oregon, Virginia and elsewhere. But concerns over privacy, along with the complexity of calculating and collecting the tax, have held back states from expanding them. Hawaiian lawmakers think they may have cracked the code. The state became the first to mandate a road user fee after a massive education campaign, which included mailing 360,000 drivers a postcard explaining how much they would pay under the future system. That feat was possible only because Hawaii records odometer readings annually. But other states are still struggling with how to graft such a program onto their existing registration or taxation systems. California is launching its fourth pilot program this month. “It is certainly the third-rail issue here,” said Democratic state Sen. Dave Cortese, chair of the California Senate’s Transportation Committee.
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