More States Turning to Electric Vehicle Fees for Infrastructure Funding

In order to finance continuing transportation infrastructure projects, more and more states are looking at the growth of electric and hybrid vehicles and seeing a promising new source of money.

According to a report just issued by the Denver-based National Conference of State Legislatures, 28 states have now implemented such policies in the form of registration fees for both electric and hybrid vehicles.

The move is seen as an inevitable result of the ongoing need for transportation infrastructure construction and upgrading, with state officials noting that the owners of such vehicles, by not using gasoline, are not contributing to fuel tax revenues.

Those taxes at both the federal and state level have long been regarded as a primary source for road and bridge construction funding.

The registration fees are categorized under the heading of “road user charges,” a transportation funding mechanism seeking to align the actual use of a given roadway by a driver.

Last year more than 727,000 electric and hybrid vehicles were sold in the U.S., a number that is expected to substantially increase in 2021.

While electric vehicles are in many ways unconventional, they still use a very conventional means of getting around: driving on streets, roads, and highways, all of which contribute to the infrastructure’s stress.

The NCSL report, Special Fees on Plug-In Hybrid and Electric Vehicles, notes that proponents of raising registration fees are doing so to “bring equity among drivers by ensuring all drivers pay for using roadways.”

In the Western states, Idaho, Utah, Wyoming, and Colorado have all imposed such feels, while the idea has yet to move beyond the talking stage in Arizona, Nevada, and New Mexico.

In Colorado, the current annual registration fee is set at $50 for all plug-in electric vehicles; Utah requires a $90 fee; while Wyoming has passed legislation requiring a $200 annual fee.

Notes the report: “At least five states—California, Indiana, Michigan, Mississippi and Utah—structure the additional fees to grow over time by tying the fees to the consumer price index or another inflated-related metric."

“These states,” continues the report, “are striving to avoid the declining purchasing power of gas taxes due to years of fixed-rate structures.”

​By Garry Boulard

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