Pa. House panel examines ways to collect ‘fair share’ of road costs from electric vehicle users

With electric vehicle sales steadily increasing and Pennsylvania’s highway maintenance costs growing, lawmakers on Monday heard testimony about ways to capture alternative fuel users’ fair share of road taxes.

Thirty states have enacted road use fees for electric vehicles, Pennsylvania House Transportation Committee Chairman Ed Neilson, D-Philadelphia, said. The challenge for Pennsylvania is determining a fair and equitable way to do so, Neilson said.

Pennsylvania is dependent on gasoline taxes for about 74% of its highway funding and the amount collected through state and federal gas taxes is dwindling as gasoline-powered vehicles become more efficient and electric vehicles become more prevalent. 

Meanwhile, the state Department of Transportation estimates that it will need an additional $9.3 billion every year for road and bridge maintenance, Nick Miller, a policy analyst for the Electrification Coalition, an organization that promotes policies to support the widespread adoption of electric vehicles, said.

Pennsylvania is not alone and other states have examined mileage-based road use fees, congestion fees and increased registration fees. While those would apply to all vehicles, electric vehicle users do not pay a fuel tax and or any additional fees. 

Some states have implemented flat electric vehicle fees as a “Band Aid solution,” Miller said, that range from $50 to $230. 

With 67,500 electric vehicles registered in Pennsylvania as of March, a flat $290 fee – in line with average annual gas tax costs –- would generate about $19.6 million. That’s a significant amount but only a fraction of Pennsylvania’s needs, Miller said.

Flat electric vehicle fees can be seen as a disincentive for consumers to make the switch to alternative fuels, Miller said, noting that the continued transition to a decarbonized energy economy is important for energy independence and for the climate.

Other options include mileage-based user fees for electric vehicles in lieu of a gas tax. Such a fee indexed to the average motorist’s gas tax contribution and mileage would come to around 2.4 cents per mile, Miller said.  

Some states are also exploring charging electric vehicle users fees based on the amount of electricity used at charging stations. While that would capture fees from out-of-state drivers passing through Pennsylvania, it would be more costly to implement for users who charge their vehicles at home.

Consumers would be required to install an additional electric meter to record the amount of electricity used for vehicle charging separately from that used by other electrical devices in a home, Miller said. 

Wayne Weikel, senior director of state government affairs for the Alliance for Automotive Innovation, an automotive industry association and lobbying group, said his organization has opposed flat electric vehicle fees across the country for many years, but has recently made a “180-degree” shift.

“I can say an EV fee is the worst form of collecting user fees except for all of the others we’ve thought of,” Weikel said.

Mileage-based fees fail to account for the miles consumers drive in other states and tracking drivers’ locations to exclude out-of-state mileage raises privacy concerns, Weikel said.

The problem of out-of-state mileage is also present in a system that taxes drivers based on the amount of electricity used, Weikel said.

Both systems would come with increased administrative and infrastructure costs.

A flat EV fee could be applied tomorrow and built into next year’s budget, Weikel said. He added that it would be the most stable source of revenue.

“Is it perfect? No. But does it address your funding problem in a reasonable and justifiable way to defend to your constituents? Yes, it ensures nobody’s getting a free ride and everybody’s contributing to the upkeep of the roads we use every day,” Weikel said.