Saturday, December 31, 2016

BONUS - The Electric Vehicle Owner’s Talking Points

This is the bonus in my series on gas tax, roadbuilding and electric vehicles. You can find links to the other parts at the bottom of this post.
  1. The gas tax does not fully fund road building and maintenance.Since the interstate highway system was implemented in 1947, U.S. spending on highways has exceeded the amount collected from fuel and vehicle fees by more than $600 billion.
  2. Most of the deficit is made up with local, state or regional bonds or municipal property taxes. So even if a person doesn’t drive, if they pay state or federal taxes, they’re paying for road construction and maintenance, a type of infrastructure that only cars, trucks and buses can use.
  3. Roads within cities are generally financed through local, property, and sales taxes. They do not get any of the gas tax collected at the pump.
  4. Electric cars not paying the small amount that purchasing gas contributes to road maintenance is a bit of a non-issue. Society is subsidizing roads big time.
  5. When Congress enacted Corporate Average Fuel Economy (CAFE) standards, they mandated auto manufacturers to improve the fuel economy across their vehicle fleet. Most people agree this is a good thing. As vehicles become more efficient, they put more miles on roads per gallon of fuel, reducing their per mile contribution to the road tax. This is what's really killing the Federal Highway Fund and state fuel taxes collected at the pump.
  6. Hybrids vehicle sales account for 2.2 percent of overall vehicle sales, and have yet to hit four percent in a given year. This indicates that the problem of gas tax revenue lost through these vehicles is negligible compared to the decrease in tax collection that has resulted from the nation’s drastic drop in overall fuel consumption. 
  7. As of August 2015, the lost gas tax revenue from electric vehicle sales of 365,000 vehicles is shown to be $71.9 million or a loss of 0.23 percent. That's two tenths of one cent of every dollar collected. Cut a penny into 10 parts, remove two of them. Not much.
  8. Current assessment is that in 15 to 25 years EVs could make an impact on revenue. This means that now is the time to come up with a new way to tax vehicles for road construction and maintenance.The Highway Trust Fund has experienced a continuing shortfall that is attributed to three major factors:
    1. more fuel efficient internal combustion engine (ICE) vehicles,
    2. the fact that federal gas rates has not risen since 1993 and
    3. the increased cost in highway construction and repairs.
...and not to the advent of electric vehicles.