Electric vehicle lobbyists on Monday urged House Republicans not to tax EVs and hybrid cars to pay for their ambitious party-line tax, defense, immigration and energy package.
The House Transportation and Infrastructure Committee’s part of the GOP’s budget reconciliation legislation, up for markup Wednesday, will include the new fees.
Even though Republicans have been looking for money to offset other spending and an extension of the 2017 tax cuts, a committee aide said the money would feed the Highway Trust Fund.
“The Highway Trust Fund is based on the user-pays principle, but a substantial number of highway users — EVs — currently do not pay this user fee in the way that other motorists do through the gas tax,” said the aide, granted anonymity to speak candidly.
“The committee’s proposal will address this fairness issue and provide a new revenue stream for the Highway Trust Fund for the first time in decades.”
But the Zero Emission Transportation Association, or ZETA, called on lawmakers to deal with trust fund questions in the upcoming transportation reauthorization.
A hearing Tuesday plans to mull ways of replenishing the trust fund, and even if new fees become law in reconciliation, other potential changes could remain on the table.
“ZETA strongly believes that the surface transportation reauthorization process is the appropriate legislative vehicle to consider addressing the [Highway Trust Fund], including how alternative fuel vehicles may contribute to it,” said a letter from the trade group.
“We urge the Committee to consider any changes to the existing funding structure of the HTF through this process,” the group said.
ZETA — a group of about 50 companies spanning the EV supply chain and led by Al Gore III — noted that gasoline taxes have not been updated since 1993 despite inflation, advancements in fuel efficiency and increased investment road spending.
“Congress must find a long-term solution to declining real gas tax revenue,” the group said, suggesting that taxing EVs and hybrids alone is not fair.
“This is not just a matter of parity, but also the only way to ensure meaningful long-term solvency,” ZETA’s letter reads.
ZETA pointed to a voluntary “vehicle miles traveled” structure to allow all drivers to either report annual odometer readings on their tax returns or accept a flat fee.
But the EV industry is facing significant headwinds in the current political environment. Republicans are looking to scrap incentives and rules seen as favoring EVs. Many conservatives have said cars that use no or less gas have been getting a free ride.
Earlier this year, Rep. Dusty Johnson (R-S.D.) and Sen. Deb Fischer (R-Neb.) introduced the “Fair SHARE Act” to impose a one-time tax of $1,000 for each EV sold and an additional $550 for vehicles with batteries that weigh over 1,000 pounds. Hybrids would not be affected.
“The Highway Trust Fund is on the road to insolvency,” Johnson said in a January press release. “It’s time to consider real changes and ensure EVs pay their fair share to maintain our roads and bridges.”
Nick Nigro, founder of Atlas Public Policy, a consulting group, said the firm conducted modeling to determine the revenue a one-time $1,000 EV fee would yield and compared revenues from tying the gas tax to inflation.
It found that an EV fee would account for less than 8 percent of the revenue gap currently expected to exist in 2033. Adjusting the gas tax to reflect inflation from 1993 to today — 41 cents per gallon — and indexing it to inflation would make up 125 percent of the projected gap.
“Congress has to make sure they get bang for the buck if they’re going to raise taxes on Americans, a rare step for them,” Nigro said in a statement. “It’s clear that adjusting the gas tax for inflation is a much better solution to the revenue problem than a new tax only on EV drivers.”
Schedule: The markup is Wednesday, April 30, at 10 a.m. in 2167 Rayburn and via webcast.
Reporter Andres Picon contributed.
This story also appears in Energywire.
