Part 4 - Are Electric Vehicles Making a Dent in Gas Tax Revenues NOW?

This is the fourth in a eight-part series on gas tax, roadbuilding and electric vehicles. You can find links to the other parts at the bottom of this post.

The "electric vehicles are expensive and paying a lot of sales tax" argument may be true, but it won't be for long. Both Chevrolet and Tesla are coming out with pure electric vehicles that will be under $30,000. And used electric vehicles have terrible resale value because new models are taking such huge leaps in technical ability. This means that you can pick up a used electric vehicle very reasonably.

Another problem with blaming EVs for the Highway Trust Fund budget deficit is their sheer numbers on the road. There simply aren't enough of them to single-handedly cause a significant or even a small problem.

“There are not enough electric vehicles on the road to make a material difference to significantly reduce the revenue to the transportation funds,” says Lloyd Levine, a consultant for the Sacramento Electric Vehicle Association. Hybrids, plug-in hybrids, and electric cars may collectively account for about three percent of car sales in any given month. That is to say, electric vehicles comprise a very small share of the vehicles on the road, and will not likely comprise a significant proportion of the vehicle pool for a decade or more.

I'm not saying that EVs should continue not paying for their contribution to road maintenance and building. I'm simply saying that the current problems are not, and can not be attributed solely to EVs. From what I can see, the more immediate issue is that conventional cars are becoming more fuel efficient. In 2012, the Obama administration released new Corporate Average Fuel Economy (CAFE) standards, requiring automakers to raise the average fuel efficiency of new cars and trucks to 54.5 miles per gallon by 2025. The current CAFE standard for small vehicles (cars) is 30 mpg.

Other unintended consequences of imposing special taxes on EVs could end up costing vehicle manufactruring states like Michigan in the long run. I think the last thing we want to do is dampen sales of a product that has a lot of potential to generate jobs for workers and new economic opportunities for auto and advanced-battery manufacturers. And as I pointed out earlier, at the moment EVs generally have a higher price tag, adding additional sales tax to state coffers.

In reality, while electric vehicle sales have been rising, they are still a very small part of the market, so imposing a new tax on them wouldn’t raise nearly enough money to overcome the shortfall states are facing from declining gas-tax revenues. Those revenues have been declining for a number of reasons including greater fuel economy in traditional vehicles and changing driving habits leading to fewer miles driven overall. This means that NOW is the right time to figure out how to tax vehicles appropriately for their use, wear and tear on roads and not to single out electric vehicles with special taxes or fees. ecocenter.org

In Part 5, I examine the actual tax impact of electric vehicles.

Part 1- Introducing the Tricky Question of Electric Vehicles Paying Their Fair Share 

Part 2 - Changing Trends Include Far More Than Electric Vehicles 

Part 3 - Gas Tax 101  

Part 4 - Are Electric Vehicles Making a Dent in Gas Tax revenues NOW?

Part 5 - Actual Impact of Electric Vehicles

Part 6 - Some States Experiment With New Ways to Fund Roads

Part 7 - The Truth is, Gas Taxes Don't Actually Paying for Road Construction and Repairs

Part 8 - Conclusion

BONUS - The Electric Vehicle Owner’s Talking Points 

Part 3 - Gas Tax 101

This is the third in a eight-part series on gas tax, roadbuilding and electric vehicles. You can find links to the other parts at the bottom of this post.

U.S. road and bridge construction and maintenance are paid for with the Highway Trust Fund (HTF) which is partially funded by federal and state gas taxes. In 2016, the United States federal excise tax on gasoline was 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel. On average, as of July 2016, state and local taxes and fees add 29.78 cents to gasoline and 29.81 cents to diesel, for a total US average fuel tax of 48.18 cents per gallon for gas and 54.21 cents per gallon for diesel. These are averages as each state enacts its own gas tax on top of the federal tax. Wikepedia.org In Wisconsin where I pay most of my gas tax, we pay $.24 per gallon for both gasoline and diesel fuel.

As vehicle fuel efficiency increases, as required by the federal Corporate Average Fuel Economy (CAFE) standards, drivers are buying less fuel per mile driven. Tbe CAFE standards are U.S. regulations, first enacted by the United States Congress in 1975, after the 1973-74 Arab Oil Embargo, to improve the average fuel economy of cars and light trucks (trucks, vans and sport utility vehicles) produced for sale in the United States. These regulations helped the economy and (unintentionally) the environment by squeezing more miles per gallon, reducing the need to import oil and reducing carbon added to the atmosphere. Already in the 1970s, each mile driven was adding less tax to the HTF.

Fast forward to the advent of more fuel efficient hybrid and electric vehicles, and states are noticing big deficits in their road-building budgets. Lawmakers and tax collectors saw the obvious problem, electric vehicles (EVs) that don't pay gas tax were to blame. And some states decided they weren't going to idly stand by and put up with these tax evaders.

Right Now, Electric Vehicles are NOT Getting a Free Ride

There are some arguments to be made that EVs are not necessarily getting the free ride people think, even without paying gas tax for miles driven. “While it is true that electric vehicles do not burn gasoline and so do not contribute to the gas tax, electric vehicles generate more in registration fees and sales taxes because of their relatively higher sales prices,” says Ecology Center’s Charles Griffith. “Compared to their non-electric counterparts, electric vehicles contribute more gross revenue and more revenue per mile driven to the state coffers, so saying that electric vehicles get a ‘free ride’ on our highways is simply not true." Ecocenter.org

However, with the advent of the sub-$30,000 Chevrolet Bolt and a Tesla sedan (both releasing in 2017), this is a short-lived argument. So, the real question is, are electric vehicles making a dent in gas tax revenues now? 

In Part 4 I explore how electric vehicles are making a dent in collected gas taxes.

• Part 1- Introducing the Tricky Question of Electric Vehicles Paying Their Fair Share 
• Part 2 - Changing Trends Include Far More Than Electric Vehicles 
• Part 3 - Gas Tax 101  
• Part 4 - Are Electric Vehicles Making a Dent in Gas Tax revenues NOW?
• Part 5 - Actual Impact of Electric Vehicles
• Part 6 - Some States Experiment With New Ways to Fund Roads
• Part 7 - The Truth is, Gas Taxes Don't Actually Paying for Road Construction and Repairs
• Part 8 - Conclusion
• BONUS - The Electric Vehicle Owner’s Talking Points 

Part 2 - Changing Trends Include Far More Than Electric Vehicles

This is the second in a eight-part series on gas tax, roadbuilding and electric vehicles. You can find links to the other parts at the bottom of this post.

Twenty first century trends indicate an overall reduction in the demand for gasoline. First, as baby boomers age, they are driving less. That's a lot of people not using their cars as much. Next Millennials, a generation even larger than Boomers, tend to favor walkable neighborhoods and jobs they can walk, bike or take mass transit to. We all know who the Boomers are, but the term Millennial may need a bit of explanation.

Millennials have surpassed Baby Boomers as the nation's largest living generation, according to population estimates recently released by the U.S. Census Bureau. Millennials, whom we define as those born between 1982 and 2004, now number 75.4 million, surpassing the 74.9 million Baby Boomers (ages 51-69). Millennials eschew the traditional one-car-per-person household, opting to share cars, carpool, rent or use community cars as needed, etc. Similarly, over the past 25 years, there has been a significant decrease in the percentage of young people getting a driver's license. According to the Federal Highway Administration, in 2008, 31 percent of 16-year-olds had a license, compared with 46 percent in 1983. In addition, thanks to a recent weak economy and demographic shifts, the number of miles driven in the U.S. has generally declined or been stagnant since 2007. These generational changes and attitudes are resulting in fewer miles driven, which result in less gas tax collected at the pump.

However, all of these trends and demographic shifts pale in comparison to the real gas tax killer. In the 1970s in an effort to improve gas mileage, a max highway speed of 55 miles per hour helped reduce fuel usage by improving miles per gallon by up to 20 percent. I have read that for every mile faster than 55, the average vehicle loses two percent MPG. A clearer explanation comes from fueleconomy.gov. While each vehicle reaches its optimal fuel economy at a different speed (or range of speeds), gas mileage usually decreases rapidly at speeds above 50 mph. You can assume that each 5 mph you drive over 50 mph is like paying an additional $0.15 per gallon for gas. Kinda makes driving across town to save $.03 per gallon a little silly.

When Congress enacted the Corporate Average Fuel Economy (CAFE) standards, they mandated auto manufacturers to improve the fuel economy across their vehicle fleet. 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 the actual gas tax killer - government mandated fuel-efficient vehicles are getting more miles per gallon, and therefore buying less gas and paying less tax. One could say this is an argument against government mandates. I think this is precisely the role of government, to progress technology and society in an upward trend. Seriously, who’s losing? Consumers get more miles per gallon.

For example, one of the reasons I bought a 2013 VW Golf TDI was because it got 40+ miles per gallon. My insistence on purchasing a fuel efficient vehicle was economic, environmental and practical. However, by purchasing this vehicle vs. a vehicle that got a more typical 25 miles per gallon, I was legally and without anyone turning their head, paying 62 percent less gas tax by driving the Volkswagen. Essentially, I gave myself a legal gas tax break.

The Volkswagen with 40+ MPG is simply an example of how automakers are designing, building and marketing conventional fuel-burning vehicles that burn less fuel. Automakers are successfully improving engine design, using lighter materials like aluminum and improving aerodynamics, all of which improve fuel efficiency. According to the University of Michigan Transportation Research Institute, the typical car sold in March 2015 gets 25.4 miles per gallon; that’s up 26 percent from October 2007 (but still a far cry from the 40+ MPG of the Golf). 

This means that CAFE standards, changing demographics, preferences and behaviors have all left a budgetary void for road maintenance and construction. Electric vehicles have very little to do with road tax shortfalls. 

More in Part 3 about the gas tax.

• Part 1- Introducing the Tricky Question of Electric Vehicles Paying Their Fair Share 
• Part 2 - Changing Trends Include Far More Than Electric Vehicles 
• Part 3 - Gas Tax 101  
• Part 4 - Are Electric Vehicles Making a Dent in Gas Tax revenues NOW?
• Part 5 - Actual Impact of Electric Vehicles
• Part 6 - Some States Experiment With New Ways to Fund Roads
• Part 7 - The Truth is, Gas Taxes Don't Actually Paying for Road Construction and Repairs
• Part 8 - Conclusion
• BONUS - The Electric Vehicle Owner’s Talking Points 

Part 1- Introducing the tricky question of electric vehicles paying their fair share

This is the first in a eight-part series on gas tax, roadbuilding and electric vehicles. You can find links to the other parts at the bottom of this post.

The nugget for these posts was born when I first brought up the idea of buying an electric vehicle (EV) with my dad, he was supportive AND had some reservations. "Roads are built and maintained with the gas tax. You won't be paying that, so you aren't paying your fair share." The A+B does not equal C equation sounded logical, and at the time, I had no response about this concern. During that visit, I agreed with him. States and the federal government will need to figure out a new way to pay for the roads that both fuel-driven and electric vehicles use.

I left uneasy that I would not be paying my fair share. And now that Jay and I own a Chevrolet Volt, a gas/electric hybrid sedan that doesn’t use any gasoline if driven <50 miles on an electric charge that also gets nearly 50 miles per gallon fuel when we travel more than 50 miles burning fuel, I've been thinking more about that conversation with dad. Since we haven't added gas to the vehicle since buying it a month ago, it was time to do some research.

The original idea behind funding road building and maintenance with the gas tax is the more one drives on publicly built roads, the more a vehicle wears and tears roads and bridges, and so with increased fuel purchases, the more the driver pays at the gas pump. Likewise, bigger and heavier vehicles that do more damage to roads and burn more gas pay a larger amount by buying more fuel. By devising a gasoline tax, we created a “use fee” that was easy to collect. By taxing drivers at the pump, the gas tax effectively charged roadway users their fair share.

Back in the "good old days” when vehicles used lots of gas per mile driven, this tax system nearly funded all road building and maintenance. However, herein also lies the problem: the gas tax only works if we continue to burn fuel at the same rate as when this tax scheme was created, and only works if we continue to drive a lot. Both of these trends are changing.

This entry is the first in a series about the gas tax and why we have a much larger problem than vehicles that don't burn fuel using public roads. I invite you to read about my research, exploration and thoughts on the following topics.

• Part 1- Introducing the Tricky Question of Electric Vehicles Paying Their Fair Share 
• Part 2 - Changing Trends Include Far More Than Electric Vehicles 
• Part 3 - Gas Tax 101  
• Part 4 - Are Electric Vehicles Making a Dent in Gas Tax revenues NOW?
• Part 5 - Actual Impact of Electric Vehicles
• Part 6 - Some States Experiment With New Ways to Fund Roads
• Part 7 - The Truth is, Gas Taxes Don't Actually Paying for Road Construction and Repairs
• Part 8 - Conclusion
• BONUS - The Electric Vehicle Owner’s Talking Points 

Solar panels commissioned, we're making electrons!

Update on our photovoltaic (PV) system. We are now creating electricity. With shortened days and snowfalls covering the panes for a few days until the snow blows or slides off, we're not creating nearly the maximum output, but it's still exciting to think that some of the energy we use each day comes from our panels. Below is a snapshot from the app (yes, it's got an app!) that shows December so far. You can see the days when there was snow on the panels (17-21) and when it's been cloudy (most of early December). As the days lengthen and sun gets higher in the sky, we'll get closer to our peak production capacity of six kilowatts and the production will average out.

In case you're wondering how all this works, so was I. I looked this up from eco2solar.

Solar PV systems use cells to convert sunlight into electricity. The PV cell consists of one or two layers of a semi conducting material, usually silicon. When light shines on the cell it creates an electric field across the layers causing electricity to flow. The greater the intensity of the light, the greater the flow of electricity. PV cells are referred to in terms of the amount of energy they generate in full sunlight; know as kilowatt peak or kWp.

I wrote a series about the solar system, if you'd like to read all the parts of this series, you can see them here.

Part 1 - How Volkswagen is Helping us Repay the Planet for Its Sins
Part 2 - Our Search for a Cleaner Car
Part 3 - Buying a Used 2016 Chevrolet Volt
Part 4 - A Lesson on Creating Clean Energy at Home
Part 5 - Making the Decision to Add Solar to our Urban Roof

Here at the bottom the app screen shot is cut off. It calculates an equivalent for three things based on how much energy we produced. They are:

• 2.16 equivalent trees planted
• 167.55 light bulbs powered for a day
• 85.61 pounds of CO2 saved from entering the atmosphere.

Meet Oscar and Bruno

If a picture says a thousand words, these are worth about a million.

We adopted Bruno (gray) and Oscar in October, but it took a long time for them to tell us their names. Oscar let us know first. The gray one whispered "Felix" in deference to The Odd Couple. However, our feline matron, Feliz, was not amused by the mere one letter difference between their names. Thus, we asked the gray one to continue to ponder his name.

Feliz was not amused with Felix's first choice of a name. He went back to the name book.

After a bit of thinking, the gray one came upon a list of Sesame Street characters, and to his delight discovered that Oscar the Grouch had a companion, a friend if you like, in Bruno the Garbage man. On the show, Bruno would pick up Oscar's can and take him for a walk around the neighborhood. Bruno is also a bit bigger than Oscar.

So, Bruno it is. We're loving having the kittens around.
The furniture isn't sure.
And Feliz still isn't amused. But she does love the extra doses of cat nip she's been getting!

Chickens earn their keep

This summer I built a chicken tractor. You can read more about that here. 

I built the dimension to be the same width and half the length of our backyard 5'x16' raised garden beds. The 5'x8' tractor fits neatly on top of the sides of the beds.

This allows me to put the lightweight tractor over a bed, and then after stuffing the birds in there (they haven't figured out how to get up into the beds and the tractor on their own) they scratch, poop and generally make a mess of the garden. This is EXACTLY what I want. They till the soil, eat bugs and leftover seeds and plant material.