HARRISBURG (TNS) — A bill that would establish a new annual fee for owners of electric and plug-in hybrid vehicles to offset the loss of gas tax revenue on those vehicles is headed to Gov. Josh Shapiro’s desk.
The new fee, which Shapiro is expected to enact, is seen as a way to re-level that part of the highway construction funding effort that has traditionally fallen on drivers paying state and federal taxes at the gas pump. EV drivers avoid that tax.
“Everyone who uses Pennsylvania roads should have to pay their part to help keep our roads safe and our bridges in top shape,” House Transportation Committee Chairman Ed Neilson, a Democrat from Philadelphia, said Wednesday.
The new fees, which passed the state Senate on an overwhelming bipartisan vote Thursday, would be set at $200 for 2025, and jump to $250 in 2026. Every year after that, the fee would be reset based on the prior year’s consumer price index.
Owners of plug-in hybrid cars, who still buy some gas for fuel, would pay 25 percent of the EV fee, or $50 in 2025.
The fee would be assessed simultaneously with the annual vehicle registration, though the state Department of Transportation has been asked to give motorists the option to pay the EV fee in monthly installments.
If it is not paid, however, the registration will not be considered valid for law enforcement purposes.
Pennsylvania is relatively late to this game; at least 36 other states already have a similar fee in place.
According to fiscal notes worked up for Senate Bill 656, the proposed fee would generate about $16 million in 2025, all of which would be deposited in the state’s Motor License Fund that helps pay for construction, maintenance, repair and safety improvements on highways and bridges.
That could approach $30 million by the end of the decade. That’s a relatively small piece in the highway construction funding ocean, which has been super-charged in recent years by federal infrastructure bills. But it should, proponents say, bring some equity back to what motorists pay.
The number of battery-powered electric vehicles registered in Pennsylvania has grown from 11,343 in March 2020 to 63,247 in January, according to PennDOT.
The final bill, a compromise between competing House and Senate bills, drew scattered opposition in final votes in the House and Senate this week.
One of those opponents, Rep. Greg Vitali, D-Delaware County, argued the fee undermines one of the savings that helps encourage people to consider buying electric cars and trucks at a time when the battle against climate change needs more recruits faster than ever.
Gas tax savings, Vitali said, are a reward that they’ve earned.
Rep. Dan Moul, R-Adams County, argued that it would be better to tie motor vehicle fees to actual driver usage of highways and roads.
But many more legislators said the perception of fairness to their gas-guzzling constituents is more important. And Neilson, the Transportation Committee chair, noted the bill has support from multiple environmental organizations.
Currently, electric vehicle owners are supposed to be paying an alternative fuel tax on electricity.
In practice, however, most owners do not either because they are unaware of that levy, or because the process is too cumbersome, with owners having to self-report the tax to the Department of Revenue monthly based on how much electricity they use to charge their vehicles at home.
The alternative fuel tax is abolished by this bill.
