|
 The federal fuel tax has not increased since 1993, and since it
is not pegged to inflation, collections are insufficient to maintain our
highways without the infusion of additional funds from general revenues. The
Highway Trust Fund currently has two accounts – one to fund road construction
and surface transportation projects and a second for mass transit. One cent per
gallon also is used to fund underground storage-tank removal. Over time, the
diversion of money from the fund to pay for “non-highway” projects has been
growing, making the shortfall even larger.
This shortfall is worsening as EVs take a larger share of
vehicle sales. Since EVs do not use liquid fuels to propel them as do ICE
(internal combustion engine) vehicles, they are not contributing to the
maintenance of our highways. Some observers argue that vehicles in general
should be charged a miles-driven tax. It might seem to make sense that the more
miles one drives the more one should pay to maintain our roads, but there are
other considerations.
The current fuel tax is very fair, in that larger and heavier vehicles damage
our roads more than smaller, lighter vehicles. They also consume more fuel;
thus, they pay more tax. Some estimates suggest that an 80,000 pound truck
damages the road as much as 5,000 to 10,000 cars. If someone drives a large,
less fuel-efficient pickup truck, the driver pays more fuel tax than someone who
drives a subcompact car. But with a charge-per-mile tax, this would not be true
– unless the assessment per mile driven is higher for large EVs and lower for
smaller EVs.
But who would decide how much drivers would pay? Today, drivers make that
decision, based upon what vehicle they choose to drive and how many miles they
choose to drive in it. Those who drive smaller, more efficient small cars pay
less tax, and those who choose to drive larger vehicles pay more. This is
inherently fair.
My suggestion: an electricity tax could be added to public EV fast-charging
stations that would be the equivalent of the current fuel tax. I have found that
a rule of thumb for many EVs is that they consume about one kilowatt hour of
energy for every 3.5 miles of driving. If a comparable ICE car achieved 30 miles
per gallon, the 18.4 cents tax per gallon would equal 0.61 cents per mile. Thus,
2.14 cents for each kWh used at public fast-charging stations could be added to
help pay for our highways. This is a start, but it would hardly make up for the
shortfall in revenue from EVs, since it does not account for the fact that most
EVs are charged at home.
Charging vehicles a per-mile fee for
using our highways also raises concerns of privacy and security. The privacy
issue involves the government knowing where you are and where you have been
(though our smart phones are already doing the same thing). More and more of our
cars are connected with WiFi hotspots, along with digital updates from the
manufacturer (again just like our phones).
But what would happen if a rogue entity were able to hack into our connected
cars and make them unable to start, or worse, cause an accident? It reminds us
that the IRS, Justice Department, and the Defense Department all experienced
recent and harmful electronic intrusions. I hope our auto manufacturers have
better technological defenses than our government agencies, but I doubt it.
[ to
top of second column] |
There are still other concerns. If we stopped using
a fuel tax, everyone would have to install a black box in their car
to assess the mileage tax. It would certainly be better to continue
the fuel tax for ICE cars and then charge a mileage tax on the more
modern and technologically capable EV vehicles that are more
connected. A percentage of fuel-tax collections also come from
non-road uses, such as when I fuel the John Deere tractor I use to
cut fields around my home. Every time I fill up my tractor, I am
helping pay for our highways, though I never drive my tractor on
them. Why stop this extra source of revenue? I also
wonder who would decide what to charge for a miles-driven tax.
Ideally, it would be Congress that sets the federal fuel tax, but
critics would point out, accurately, that the tax has not been
raised since 1993 (and it would not be popular politically to do
so). Instead, the bureaucracy might prefer that an unelected
regulatory panel decide the amount of the tax. But then what would
stop that panel from demanding a higher fee, in the hope that this
charge would encourage people to drive less?
Or perhaps it would assess fees to discourage driving at certain
locations, similar to New York City’s proposal to charge congestion
fees of $11.52 per car and $25.34 per truck that enter the city
south of Central Park. London charges about $21 to drive into the
city between 7 a.m. and 10 p.m. every day except Christmas.
Let’s say Highway 81 has lots of road construction over the next
four years. What would prevent the government from charging a triple
tax for drivers, to encourage them to find other routes? This could
be the kind of nightmare caused by central planners looking to
manipulate driving habits.
Conversations I’ve had lead me to believe that consumers would be
willing to pay the additional 13 cents per gallon needed to maintain
our highways. This would allow for the continued diversion of funds
to other non-highway projects such as mass transit and bike paths.
We must also find ways to charge EVs the fuel-tax equivalent based
upon a yearly assessment, a tax on energy consumption, a
miles-driven tax, or some combination of the three.
What we do not have, as far as I can tell, is much discussion on how
we are going to do this. Some say that government finds it easier to
spend money than to collect it. Others rationalize exempting EVs
from such fees as a subsidy to spur acceptance of the new
technology, or as a deserved reward in the belief that EVs are
beneficial for the environment.
Finally: even if we’re successful in raising the extra 13 cents per
gallon of fuel or electricity equivalent, it would require a lock
box to prevent those funds from being diverted to purposes other
than maintaining our highways. But this is a problem universal to
public financing.
Geoffrey Pohanka is
a third-generation automobile dealer and chairman of the Pohanka
Automotive Group headquartered in Capitol Heights, Maryland.
Click here to respond to the editor about this article |
