{"id":13469,"date":"2023-07-26T14:49:39","date_gmt":"2023-07-26T18:49:39","guid":{"rendered":"https:\/\/pluginamerica.org\/?p=13469"},"modified":"2023-07-28T16:14:42","modified_gmt":"2023-07-28T20:14:42","slug":"3-step-guide-states-in-funding-highways","status":"publish","type":"post","link":"https:\/\/pluginamerica.org\/3-step-guide-states-in-funding-highways\/","title":{"rendered":"Road Usage Fees: A 3-Step Guide for Incorporating EVs"},"content":{"rendered":"

It’s that time of year again\u2013long days and warm temperatures signal it\u2019s time for the great American road trip. As drivers embark on cross-country adventures, we take for granted miles of open roads.\u00a0<\/span><\/p>\n

But who pays for these roads? You do, every time you pull up to the pump. States rely on gas taxes to fund road improvements and repairs. Since electric vehicles (EVs) don\u2019t use gas<\/span>, they don\u2019t contribute to this fund. As EVs become more popular, states are developing new approaches for how to pay for roads. No matter what we drive, we all want smooth roads and safe bridges.\u00a0<\/span><\/p>\n

Plug In America believes that EV drivers should pay their share in a way that is fair. <\/b>Here is our recommended 3-step process to guide states in funding highways.\u00a0\u00a0<\/span><\/p>\n

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Step 1: Identify Revenue Replacement Baseline<\/b><\/h2>\n

Since all states have a gas tax in place, let\u2019s not recreate the wheel. To develop a baseline of what an average vehicle pays, you can use the average annual <\/span>Vehicle Miles Traveled (VMT)<\/span><\/a> in your state and divide it by the expected fuel efficiency of a passenger vehicle. This provides us with how many gallons of gas a vehicle will need to purchase each year. We then multiply the number of gallons of gas needed each year by the <\/span>gas tax rate per gallon<\/span><\/a>. This gives us an estimate of what a vehicle should contribute in annual fees.\u00a0<\/span><\/p>\n

For example, in Figure 1 we look at a 30 mpg sedan in Arizona. Based on average annual miles traveled, the estimated fuel economy, and the gas tax rate, we can determine that the average car in Arizona contributes about $82.90 a year in gas taxes. We think the average EV should pay the same. This is our baseline.<\/span><\/p>\n

Figure 1: Replacement Revenue for a 30 mpg Car in Arizona<\/b><\/p>\n

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Step 2: Address Funding Gaps<\/b><\/h2>\n

Many states are already experiencing shortfalls for highway funding, primarily because cars have become more fuel efficient and because gas taxes aren\u2019t indexed to inflation. To address these, state legislatures can adjust gas taxes to make up funding gaps and index them to inflation. If the gas tax goes up, EV road user fees will go up the same amount, ensuring equitable contributions from both fossil-fuel and electric vehicles. Indexing fuel taxes to inflation allows state legislatures to \u201cset it and forget it\u201d so that they do not have to keep changing gas tax rates.<\/span><\/p>\n

Step 3: Customize Road User Fees<\/b><\/h2>\n

This is the part where states can express their individuality and customize their EV road user fees to align with state policy goals and take advantage of existing mechanisms. There are dozens of approaches states can take. Here are a few of our favorites:<\/span><\/p>\n