HARRISBURG — While Pennsylvania’s tax revenue in 2018-19 exceeded expectations, the state collected less from the gas tax than it had a year earlier.
The Motor License Fund — which includes gas tax and revenue from license renewals and fees — ended 2018-19 almost $58 million below what the state had projected for the year, according to the Department of Revenue.
It’s a trend that will likely continue and only get worse as more drivers get more fuel-efficient vehicles or switch to vehicles motored by engines that don’t use gas at all, said Bob Latham, executive vice president of the Associated Pennsylvania Constructors, the trade group for road builders.
That’s bad news when you depend on gas tax to pay for road repairs, Latham said.
“Basing highway funding on consumption of a commodity marked for a great reduction in the next 10-20 years doesn’t make sense,” Latham said.
His group is backing legislation that was approved by the House transportation committee in June that would levy a new $150 annual fee added to the cost of a vehicle registration for electric passenger vehicles.
State Rep. Mike Carroll, D-Luzerne County, is the author of the legislation, House Bill 1392. He said that the average motorist pays about $275 in gas tax at the pump a year, so electric car drivers would still be paying less than they would if they had gas-powered vehicles.
Carroll’s legislation, in its current form, would not include any provision to charge hybrid vehicle owners extra. He said an amendment will likely be added to the bill to charge hybrid owners a fee, but it would be less than the fee charged to people who own vehicles that don’t use any gas. He didn’t have any specifics about the hybrid fee on Tuesday.
Last year, Pennsylvanians bought 6,063 electric vehicles and 10,902 hybrid vehicles, according to the Auto Alliance, the trade group representing car makers. Only California, Florida, New York, Texas, Washington and Illinois had more electric or hybrid cars sold in them last year than Pennsylvania, according to the Auto Alliance.
Twenty-one states have fees for electric vehicles to compensate for the fact that the vehicle owners don’t pay gas tax at the pump, according to the National Conference of State Legislatures. Among nearby states, only Virginia and West Virginia have electric vehicle fees, according to the NCSL. In Virginia, motorists pay a $64 electric vehicle fee. In West Virginia, the electric vehicle fee is $200 for electric vehicles and $100 for hybrids, according to the NCSL.
Carroll said that because of the support of the highway construction industry, he thinks his legislation will move rapidly in the General Assembly.
“There are going to be more electric vehicles tomorrow and there’s going to be more the day after that,” Carroll said. “We have to get this right now.”
The legislation passed out of the transportation committee with bipartisan support in a 21-2 vote. Carroll said the only opposition came from progressive lawmakers who objected that the measure would deter people from buying electric vehicles.
The electric vehicle fee isn’t the only alternative available for states to try to cope as vehicles become more fuel-efficient or run entirely on electricity though.
The I-95 Corridor Coalition — based in Maryland, but including transportation agencies in Pennsylvania and others states along the interstate — is in the middle of examining the feasibility of charging people a fee based on how much they drive rather than a flat tax on the gas their vehicles consume.
That study is set to begin a new phase this month using 1,000 volunteers who will drive with devices in their vehicles tracking their travels, Latham said. At the end of the month, those volunteers will receive bills showing much they’d have to pay if they were actually being charged the mileage fee instead of gas tax, according to the coalition.
The hypothetical mileage fee is based on the amount needed to replace the gas tax in each state. In Pennsylvania, that amounts to 3.18 cents a mile, according to the coalition. In Maryland, where the gas tax is less, the mileage fee would be less than 2 cents a mile, according to the coalition.
Latham said any move to such a mileage fee would be difficult unless there was a national move, because it would be a challenge to collect fees from interstate travelers. In the long-term, the idea makes sense, he said, but in the short-term, his group is looking for Carroll’s legislation to offer a way to immediately respond to the concerns about getting highway funding from electric vehicles.