PROVIDENCE — In an electric vehicle world, what happens to the gas tax?
Every time Rhode Islanders go to fill their cars, they’re taxed 37 cents for every gallon of gas purchased, with proceeds from that tax going toward maintaining paved roads, with a smaller portion set aside for public transit.
But the Act on Climate law envisions a world without fossil fuel infrastructure to reduce emissions, including the everyday gas-guzzling cars that clog up Interstate 95 every morning and afternoon. What’s going to replace that revenue stream for roads and transit in a shiny new gas-less future?
If you’re Gov. Dan Mckee, who took his first ever stab at answering that question this year, the answer is an additional registration fee charged for electric plug-in and hybrid vehicles. But the move has been criticized by some environmental groups that are worried such a fee would stunt the transition away from gas-powered cars.
“We’re concerned about the impacts it will have on people making decisions about what vehicles they’re going to switch to in the future, especially when Rhode Island really needs to ramp up its electric vehicle adoption rates to decarbonize our transportation sector,” said Tina Munter, Rhode Island policy advocate at the Green Energy Consumers Alliance, which has come out against the new registration fee.
Under the governor’s proposal, battery electric vehicles (BEV) would pay an additional $150 annually, with plug-in hybrids paying an additional $75 per year, when owners acquire or renew their state registration.
State budget officials said they calibrated the fee structure to make up for the assumed gas tax proceeds that electric vehicle owners would pay if they were driving gas-guzzling cars instead. McKee’s proposal, however, doesn’t include any additional funds for the Rhode Island Public Transit Authority; instead, all proceeds from the EV fees go toward the state’s highway maintenance fund.
The proposed fee would align Rhode Island with 39 other states that already impose similar fees on EVs, according to budget officials, with another 32 having similar fees on plug-in hybrids.
“This is something that is meant to equitably distribute the costs of highway maintenance and transportation infrastructure on all users of the road,” state budget officer Joseph Codega said at a recent House Finance Committee meeting. “Right now, the share of battery electric and plug-in vehicles is relatively small … but by the Department of Revenue’s projection, battery electric vehicles share will grow to 12.1% of all cars by 2030.”
Right now, Rhode Island has 11,264 battery electric vehicles registered, according to data from the state Office of Management and Budget. Another 9,181 plug-in hybrid vehicles are registered in Rhode Island. By 2030, OMB estimates there will be 86,442 battery electric vehicles registered in Rhode Island.
OMB estimates that gas-powered cars drive around 11,000 miles a year and account for around $150 in gas taxes on average. With the $110 a registered passenger vehicle is likely to pay in fees every other year, the total amount of cost for a gas-powered car is around $260.
Under the governor’s EV fee plan, EV owners would end up ponying up $410 every two years, with only fees for the plug-in hybrids becoming equitable with what gas-powered vehicles pay now. Advocates like Munter argue that’s not fair.
“There’s no nuance between how much you’re driving and how much wear and tear you’re causing on the roads, which is reflected in the gas tax,” said Anna Vanderspek, electric vehicle program director for the Green Energy Consumers Alliance. “If you’re filling up more, you’re driving and using the roads more. Where if you’re only someone that drives a couple miles a month, you only use your car to commute from a train station where you work, you’re still paying the same money into that fee as somebody who drives every single day all around Rhode Island.”
Munter and Vanderspek acknowledge the gas tax will need to be replaced. They note proceeds from the state gas tax have been slowly declining over the past 25 years. In 2005, the state collected nearly $4.8 million in gas proceeds. Last year, the state collected just over $4.3 million.
So what should the state be prioritizing for replacement instead? Munter and Vanderspek said the state should explore a suite of different options, ranging from mileage-based user fees, to basing excise taxes and registration around the weight and size of cars.
EVs often weigh hundreds or thousands of pounds more than their gas-powered equivalents. On average the battery in an EV is going to add another 1,000 pounds to the weight of the vehicle, and brands like Teslas can have batteries ranging from 1,200 to 1,700 pounds.
“A Chevy Silverado, for example, that drives 10,000 miles a year and gets 25 miles per gallon is only paying $148 in gas taxes a year,” Vanderspek said. “And that vehicle is causing way more damage to our roads than a Toyota Prius Prime, but would be paying less than the transportation costs that are being proposed.”
The governor’s EV fee proposal is far from becoming law. The General Assembly is expected to produce its final state budget for a vote in June.