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Arkansas roads agency looks at fee levy for electric, hybrid vehicles

Director: Would earn little, but main concern is fairness by Noel Oman | January 16, 2017 at 5:45 a.m.

A proposal to increase the annual registration fee for electric vehicles to a level equal to what gasoline-powered vehicles pay in fuel taxes would raise a nominal amount for road maintenance.

After all, the actual number of electric vehicles in Arkansas is nominal, too -- 333 at last count versus 2.8 million vehicles that use gasoline, according to the Arkansas Department of Finance and Administration.

But raising money is not the point, according to Scott Bennett, the top official at the Arkansas Highway and Transportation Department. At least not yet.

"A lot of that is a policy issue and a fairness issue that we think needs to be set now before that sector really continues to grow so it is already in place because it's fair -- it really levels everything out," Bennett, the department director, told the Arkansas Highway Commission at a meeting to discuss legislative priorities earlier this month.

Under the preliminary proposal, registration fees also will go up for hybrid vehicles, which use regular gasoline but pay less in taxes because they get significantly improved mileage per gallon.

No bill has been filed yet, but preliminary estimates for the annual registration fee for electric vehicles would rise to $180 a year, according to one department official.

The proposal makes sense to Carl Anthony of Conway. Even though Anthony and his wife, Carol Brown, each drive Tesla electric cars, he said it doesn't mean they and other electric vehicle owners are entitled to free rides where road maintenance is concerned.

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"I feel like we should be helping out," said Anthony, a music professor at the University of Central Arkansas. "Why not? It doesn't sound exorbitant. We should help pay for the roads just like anybody else."

Anthony expressed hope that it wouldn't keep people from purchasing electric vehicles. But, he noted, other states have been enacting or considering similar fee increases.

At least 10 other states have imposed similar fees on electric vehicles.

Indiana might also be added to the list. Its legislature is considering a proposal to institute a $150 annual fee for buyers of electric vehicles and plug-in vehicles. At the same time, the state would impose a $15 annual registration fee on all vehicles and raise the state tax on gasoline by 10 cents per gallon.

The Highway Department also still wants to establish a voluntary pilot project to evaluate the taxing of vehicles on the basis of how many miles they traveled as an alternative to paying fuel taxes. The so-called vehicle miles traveled tax has been weighed as an option nationally as a replacement for the federal taxes on gasoline and diesel, revenue from which also helps to maintain the U.S. road system.

Revenue from federal fuel taxes also has been reduced by tougher rules increasing fuel efficiency for cars and trucks.

The department pushed similar proposals in the regular legislative session two years ago without success.

The vehicle miles traveled pilot project fared better than the alternative fuel vehicle registration fees. It won an endorsement from the House Public Transportation Committee, but it wasn't brought to a vote on the House floor.

The GOP-dominated Legislature has had little appetite to support proposals that could be construed as raising taxes.

"Part of what happened was people thought this was going to be mandated ... and they thought it was going to be a fee on top of a tax they were already paying, which is not true," Bennett said. "It was going to be in lieu of the fuel taxes they were paying at the pump.

"It is a completely voluntary program that even included self-reporting so you did not have to have some sort of GPS system on your vehicle that tracks everywhere you go. We think with a little more education we may be able to get a little more support for that."

State Rep. Mathew Pitsch, R-Fort Smith, the House majority leader who sponsored the vehicle miles traveled pilot project two years ago, agreed that his colleagues needed more information about the proposal.

"More education couldn't hurt," he said.

Bennett said that even if the proposals pass, they won't address the immediate needs of more money for road maintenance, but if they are in place now, they could ease the state's transition to alternative ways to collect revenue for roads.

"None of these things are going to be a cure-all for our revenues," he said. "The road-user fee pilot program just sets the tone for what might happen in the future.

"The other two [will produce] very, very little revenue. But if those sectors grow and the normal fuel use does not, then it kind of balances out. If fuel use goes down, revenue from fuel use goes down, then that's because alternative fuels and electric and hybrid vehicles are taking off."

Metro on 01/16/2017

Print Headline: Roads agency looks at fee levy for electric autos

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