The Utah Legislature’s proposal in House Bill 209 would drastically increase annual fees on electric vehicles, plug-in hybrid, and hybrid vehicles. Electric vehicles (EVs) have zero tailpipe emissions, making them a key solution to Utah’s climate and air quality challenges. Increasing fees for zero-emission vehicles to $300 per year – more than double what the average new gas-powered vehicle pays each year in gas taxes – is the wrong approach to solve Utah’s road funding challenges.
Today, we pay for roads primarily through gas taxes paid at the pump. The amount of money the gas tax provides every year is declining, mainly because the fuel efficiency of vehicles is going up, and the buying power of the dollar is going down with inflation. New gasoline vehicles get30.6 mpg today, which will rise to 36.2 mpg in 2025 because of federal CAFÉ standards, so owners of gasoline vehicles are buying less fuel and paying less into the system every year. EVs are a miniscule factor – even if Utah doubled the number of EVs on its roads this year,from 12,000 to 24,000, it would only reducetotal motor fuel tax revenue by one-tenth of one percent. An excessive EV fee would not only fail to raise much money, but it would also create a disincentive for Utahns to replace their gas cars with cleaner and more efficient EVs.
The method used to calculate the fees in HB 209 is flawed and fails to recognize that Utahns driving electric vehicles already pay $120 in additional annual registration fees to build and maintain Utah’s transportation system. The disproportionately high EV fees proposed in HB209 also don’t actually address the primary reasons the gas tax isn’t keeping up. We need a new, long-term solution for paying for Utah’s roads.
The current gas tax is structured so that less efficient (and more polluting) vehicles pay more in gas tax because they use more gasoline, while the more efficient (and less polluting) vehicles pay less. This incentive for efficiency is valuable and should be preserved. If Utah taxed EVs as if they drove on gasoline using the EPA’s “miles per gallon equivalent”, a Nissan Leaf driving the average annual miles driven in Utah (13,884) would pay only $40 per year.
The current annual EV fee of $120 is comparable to what the average new gasoline car pays in annual gas taxes. At 30.6 miles per gallon, a new gasoline vehicle pays about $142 per year, which will drop to $120 per year by 2025 as the average fuel efficiency for gasoline vehicles improves to 36.2 mpg. No EV should pay more than what the average new gasoline car pays in gas taxes – raising the EV fee to $300 would hurt Utah’s efforts to clean the air by stunting the EV market just as it’s starting to grow.
We want all Utahns to be able to access clean, electric vehicles -- which is increasingly possible as used EVs enter the market and the costs of EVs come down. The proposed EV fee is also a poor choice because the $300 per year fee would be collected as a lump sum, which is especially burdensome for low-income drivers, because it does not spread out costs over time like the gas tax.
Utah has taken a positive step by creating a “Road Usage Charge” (RUC) program, offered by the Utah Department of Transportation, a new approach to pay for roads by charging a vehicle based on how many miles it is driven on Utah roads rather than paying through a gas tax. Opening in January 2020, the “RUC” program is a voluntary opt-in program, and participation is still relatively small. We believe that Utah lawmakers should give this program time to mature and to better understand how it will impact transportation funding revenues and air quality in Utah.
Utah policymakers are wrestling with our transportation funding challenges. We need to create a transportation system that can help us reduce air pollution by ramping up electric cars and fleets and reduce congestion by expanding transportation options for all Utah communities. That is what Utahns want and deserve. But the fees moving forward in HB209 are misguided and penalize zero-emission vehicles. Let us not overtax the kinds of low and zero emission vehicles that our communities need to improve Utah’s air quality.
Matt Frommer is with the Southwest Energy Efficiency Project and Kevin Emerson is with Utah Clean Energy