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States turn against electric cars as gas tax revenues fall

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Michael Bastasch DCNF Managing Editor
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States are quickly learning that promoting electric cars is coming with a high price tag. Colorado has joined a growing number of states that are imposing fees on electric and alternative vehicles to recover “lost” gas tax revenues.

As of this year, Coloradans driving electric, alternative fuel and high-efficiency vehicles will pay a $50 registration fee to capture more revenue from vehicles that use less traditional gasoline. This is part of a growing trend by which states are looking to recoup declining gas tax revenues as vehicles become more fuel efficient and drivers buy more electric vehicles.

Colorado is one of at least five states that have special fees on hybrid and electric vehicles — Colorado, Nebraska, North Carolina, Virginia and Washington. Earlier this year, Oregon lawmakers were discussing a bill that would impose a fee on electric cars and those getting 55 miles per gallon or better. The bill is still sitting in the state legislature.

“States are increasingly looking at how to recoup ‘lost’ gas tax revenues for electric and hybrid vehicles. In addition to fees on such vehicles, many states tax alternative fuels, sometimes including electricity,” Jaime Rall, senior transportation policy specialist at the National Conference of State Legislatures, told The Daily Caller News Foundation in an email.

The problem state lawmakers face is that the value of the gas tax is falling due to inflation and rising construction costs. This is coupled with the fact that gasoline consumption is falling. According to the Energy Information Administration, U.S. drivers and businesses used about 133 billion gallons which is 6 percent below 2007’s record-high consumption levels.

There is a similar problem on the federal level where gas tax revenues have lost one-third of their value since 1993, says Rall, adding that the federal Highway Trust Fund could face insolvency in 2015 if this trend continues.

“Gas tax revenues are the primary source of funding for transportation infrastructure, providing close to 40 percent of all state revenues for highways and more than 90 percent of gross federal Highway Trust Fund receipts,” Rall added. “These revenues, however, have not kept up with needs. The reasons for this are many, including growing use of high-efficiency and alternative fuel vehicles.”

However, it’s not just electric vehicles that are in the crosshairs of states looking to bring in more funds. Some states are looking to tax drivers for how many miles they drive instead of how much fuel they consume. Oregon is already planning on launching their own program to tax cars on how much they drive.

Federal lawmakers are also currently discussing such a tax.

“Congress hasn’t dealt seriously with the funding issue for 20 years,” said Oregon Democratic Rep. Earl Blumenauer, who introduced a highway per mile tax bill. “With inflation and increased fuel efficiency, especially for some types of vehicles, there is no longer a good relationship between what road users pay and how much they benefit. The average motorist is paying about half as much per mile as they did in 1993.”

However, privacy advocates worry that tracking how many miles people drive would be an intrusion of their privacy.

“It would be fairly easy to turn these devices into full-fledged tracking devices,” warned the Nevada Civil Liberties Union. “There is no need to build an enormous, unwieldy technological infrastructure that will inevitably be expanded to keep records of individuals’ everyday comings and goings.”

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