How should we pay to maintain and repair roads and bridges? That question is set to become a huge issue over the next few years.
Let’s say you buy an electric car like me. Suddenly, you’re riding on the roads without paying for their upkeep. That’s because roads are maintained with both a federal gas tax and state gas tax that you pay every time you fill up. But with my Nissan Leaf, I never fill up ever.
To be perfectly honest, I’m losing track of the cost of gas. And I used to be someone who could tell you to the penny!
Tag fees for electric car owners
Washington State is the first state to say, in essence, “Clark Howard, you’re a freeloader!” Their solution to deal with people like me who aren’t paying gas taxes because we never buy gas? Electric car owners will pay an extra fee every year when they renew their plate or tag.
USA Today says several states are looking at doing the same.Virginia has an annual tax for owners of hybrids and electric cars. Texas, Massachusetts, New Jersey, and Arizona are all considering this. But it turns out that owners of electric cars are not the problem. The real problem is people buying more and more fuel-efficient vehicles.
More and more cars will have fuel economy north of 40 miles per gallon versus our current national average of around 23 mpg. For example, Ford recently announced a midsized Ford Fusion hybrid that will average 47 miles per gallon. They expect it to replace a midsized car that might have gotten an average of 20 mpgs. There’s a much more robust market for this kind of thing than my Nissan Leaf. And with more fuel-efficient cars on the roads, it goes to follow that gas tax revenue will fall and fall over time.
Taxed by the mile?
Years ago, Oregon wanted to tax you per mile you drove. The plan was to have a device installed in your car to track you via satellite and figure out your mileage driven. But people freaked because that was Big Brother knowing everything you’re doing and everywhere you’re going.
There is another alternative: Senator DeMint of South Carolina has proposed that we eliminate the federal gasoline tax and leave the job of road maintenance to the states. The thinking is that states could do road upkeep much cheaper than the feds because they wouldn’t have to meet rules about pay rates and unions.
That’s yet another way to buy us more time so we can figure this out as people start driving more and more fuel-efficient vehicles.