Washington considers annual flat fee for electric cars

Washington considers annual flat fee for electric cars

April 23rd, 2011 by Associated Press in Local - Breaking News

By ROBIN HINDERY

The Associated Press

OLYMPIA, Wash. - Drivers of electric cars may have left the gas pump behind, but there's one expense they may not be able to shake: paying to maintain the roads.

After years of urging residents to buy fuel-efficient cars and giving them tax breaks to do it, Washington state lawmakers are considering a measure to charge them a $100 annual fee - what would be the nation's first electric car fee.

State lawmakers grappling with a $5 billion deficit are facing declining gas tax revenue, which means less money to maintain or improve roads.

"Electric vehicles put just as much wear and tear on our roads as gas vehicles," said Democratic state Sen. Mary Margaret Haugen, the bill's lead sponsor. "This simply ensures that they contribute their fair share to the upkeep of our roads."

Other states are trying to find solutions to the same problem, as cars become more fuel-efficient and, now, don't use any gas at all.

In Oregon, lawmakers are considering a bill to charge drivers of electric and plug-in hybrid vehicles based on the number of miles they drive. In Mississippi, lawmakers briefly considered a similar plan. In Texas, significant opposition scuttled an electric vehicle fee.

In Washington state, some electric car drivers and lawmakers are against the fee, saying they prefer paying based on how much they actually drive.

"The Legislature saw electric vehicles are coming and thought, why not just put a fee on them?" said Dean West, an electric vehicle owner who expects to receive a pre-ordered Leaf - Nissan's new, battery-powered sedan - this summer.

"I'm always in favor of a user fee," he said. "The more you use it, the more you pay."

Plug In America, a California-based electric car advocacy group, has come out against the proposed flat fee and has urged the state to consider one based on odometer readings that owners would self-report each year.

"Electric vehicle drivers certainly want to pay their fair share," said Jay Friedland, the group's legislative director. "The danger you get into is if you treat electric vehicles in some radically different way than you treat the rest."

Of course, such use-based fees could end up costing drivers more.

Washington's 37.5-cents-per-gallon fuel tax costs the average driver about $200 a year, transportation officials say. That's equivalent to driving roughly 12,000 miles in a vehicle that gets 23 mpg.

That tax is added onto the total gasoline purchase, and is not dependent on the price of gas.

Supporters say the electric vehicle fee would raise hundreds of thousands of dollars a year to support the state's public highway system.

In a report released last month, officials estimated that transportation revenues would decrease $25 million between the current biennium and the 2011-2013 budget period, largely due to dwindling gas tax collections.

That decline has coincided with improved vehicle mileage and a drop-off in revenues from the last major round of statewide tax increases, more than five years ago, leaving lawmakers scrambling for solutions, said Sen. Dan Swecker, one of the co-sponsors of proposed fee.

"So the question is how do you account for those trends and begin to capture revenue that reflects the actual usage of the road?" said the Republican lawmaker, who estimated he pays about $400 a year in gas taxes for his Toyota Camry. "Our state doesn't change very fast. But we thought the $100 fee was a place to start, so let's start there."

Tracy Woodard, Nissan Motor Co.'s director of government affairs for North America, said her company is neutral on electric surcharge legislation being considered in various states. She called for a larger discussion at the federal level of how to deal with reductions in gas tax revenues.

"Obviously, we don't like to see barriers put up to getting electric cars on the road," Woodard said. "But we understand people need to pay their fair share for using the roads."

An Oregon bill would charge drivers of electric and plug-in hybrid vehicles up to 1.43 cents for each mile they drive, beginning with cars from the 2014 model year. It would cost about $172 per year for a car driven 12,000 miles - about the same as the gas tax paid for a vehicle that gets 21 mpg.

The measure is scheduled for its next committee vote Monday.

Use-based fees have generated their own debate.

The Texas Legislature recently put the brakes on an attempt to establish an electric vehicle mileage fee pilot program, after encountering significant opposition. The plan's backers said they hoped to try again in a couple of years.

Oregon previously experimented with using GPS devices to monitor and report the number of miles driven inside the state. Privacy advocates denounced it, fearing the government could use them to track drivers.

Mississippi lawmakers briefly considered an annual usage-based tax on electric vehicles, but the bill died in committee in February. The tax would have been equal to one-half cent per mile for the total miles traveled during the previous year, as indicated by the vehicle's odometer.

In Washington, Haugen said, she supports the idea of a use-based fee but thinks it's too logistically complex to undertake right now. Her bill would automatically expire if the state adopts such an approach in the future.

The bill's supporters acknowledge that it sends mixed signals on an emerging market that the state has tried to nurture. Washington currently waives the sales tax on electric vehicles, while the federal government provides an income tax credit of up to $7,500 to buyers.

Haugen and others say an electric vehicle fee is one of the few viable solutions to help offset lost gas tax revenues. In the 2010 fiscal year, there were just over 1,300 electric-powered vehicles registered with the Department of Licensing.

If passed, the bill would go into effect March 2012 and generate an estimated $376,000 in its first full year - a figure that's expected to rise as more drivers embrace the vehicles.

Members of both parties have criticized the bill, saying its projected revenues aren't enough to risk discouraging potential electric car buyers.

"I think we need to move aggressively and use any tools available to incentivize and support cleaner energy technologies in our transportation sector," Rep. Dave Upthegrove told fellow members of the House Transportation Committee at an April 14 hearing.

The bill has passed the state Senate but has not yet come up for a vote before the full House. Democratic Gov. Chris Gregoire, a staunch supporter of alternative energy, has not spoken publicly on the measure.

Discussion about the measure underscored a larger challenge, lawmakers said. How can lawmakers create a new system to maintain the transportation infrastructure that "makes more sense than what we have today?" Rep. Chris Reykdal asked.

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Associated Press writer Jonathan Cooper in Salem, Ore., and AP Auto Writer Dee-Ann Durbin in New York contributed to this report.