*Josiah Neeley co-authored this piece.
The light hum of hybrid vehicles that has become synonymous with New England in recent years may soon be less audible as a result of L.D. 1806, a hybrid vehicle tax proposal from the administration of Republican Gov. Paul LePage. Under the measure, the Maine Department of Transportation would collect an annual registration fee on the highly efficient vehicles in the amount of $150 for gas-electric hybrid cars and $250 for all-electric models. While billed as a way to achieve tax parity with gasoline vehicles and give the state’s crumbling infrastructure a cash infusion, the proposal would in fact punish drivers for choosing more-efficient vehicles.
The logic behind imposing a fee on electric vehicles is straightforward. As Meghan Russo, manager of legislative services for MDOT, puts it, “The idea is that the owners of these types of vehicles are paying far less in the gas tax than other vehicle owners, and they are using the highway system just like any others.” There are also concerns that, as more people switch to electric vehicles, gas tax revenue may not be enough to meet road infrastructure funding needs. The recent Infrastructure Report Card from the American Society of Civil Engineers gave Pine Tree State roads an overall D rating.
But while proponents of the fee have identified a real problem with the current funding system, their proposed solution is lacking. For one thing, the amount of the fee exceeds what is necessary to achieve parity with gasoline vehicles. According to Andrea Maker, a lobbyist for the Alliance of Automobile Manufacturers, Maine residents pay about $82 in gas tax annually. “The most the state should reasonably charge is $80 a year,” she said at the public hearing on L.D. 1806.
According to 2015 data from the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy, nine other states assess annual fees on hybrid and all-electric vehicles. If the Maine proposal takes effect, it would rank near the top of the list for highest fees.
An electric vehicle-specific fee also overlooks the fact that it’s not just electrics and hybrids that pay less in tax. Gasoline vehicles, too, are becoming more fuel-efficient. That’s a good thing, but it means that some people are paying less now to drive on Maine’s roads than they would have in years past. Differences in fuel efficiency mean that a gas tax will always charge some types of vehicles more than others, even when they put the same wear and tear on the road.
Rather than trying to patch its flawed gas tax, Maine should look at ways to overhaul its funding system altogether. Luckily, a variety of alternate funding mechanisms are available that could put road funding on a sustainable path without punishing fuel-efficient vehicles. For example, instead of using an indirect measure of road use, like gasoline consumption, Maine could charge based on vehicle miles traveled. In a more sophisticated system, charges could be adjusted based on the weight of the vehicle – since heavier vehicles do more damage to the roads – or the type of roads driven on. Versions of this approach have already been successfully adopted in states like Oregon.
A study by the National Surface Transportation Infrastructure Financing Commission concluded that charging drivers based on vehicle miles traveled is the most viable long-term option for funding road maintenance because it ties the amount of the charge to the cost of using the roads. As a result, a vehicle-miles-traveled system provides a more stable model for funding roads while encouraging efficient road usage.
Instead of selectively imposing new taxes on clean-driving vehicles, Maine should look for ways to make its system fairer and more sustainable over the long term.
Image credit: Peter Gudella