An electric car showroom in Seattle, where the governor just blocked a bill banning gasoline cars by ... [+]
Washington Governor Jay Inslee issued a veto of a bill that would have required all cars sold in Washington after 2030 not burn fossil fuels, even sooner than the California target. In outlining the reason for the veto, the Governor stated he approved the ban, but did not want it tied to implementing a new road usage fee system to replace gas taxes. He said he also approves the road usage fee, but doesn’t want the two tied together.
Today, taxes on gasoline sales, along with car license fees, are allocated to building and maintaining the road infrastructure. Many have liked this because it makes those who use the roads more pay more for maintaining them, and also puts more burden on those who buy gas guzzlers, causing them to pay a small portion of the externalities of burning that fuel. At the same time, others have declared it unfair that drivers of electric vehicles avoid the gas tax and still use the roads, even though there are often state taxes on electricity which are similar to the gasoline tax, but not allocated to roads. At the same time, sentiment, and laws like the one not signed by the governor are attempting to reward and mandate EV driving to reduce those externalities, and it seems odd to not to be “unfair” in this way.
The governor expressed very valid concern over privacy issues with road usage fees. Many proposals for such fees have mandated an “Orwell” device that tracked all the vehicle’s driving to calculate the road use and taxes. The Orwell approach lets a state tax only driving within that state, or even to tax different roads differently. Indeed, that approach could even toll individual roads differently. Gasoline taxes don’t precisely get collected by state — you can fill up in Portland and do lots of your driving in Washington, but they work as a broad brush. Certainly for those who do a cross-country road trip, they will buy their gasoline (or electricity) in the states they actually drive.
At the same time, he expressed concern about the cost of moving to road usage pricing. That’s 20th-century thinking, because the cost of doing it, even in privacy protecting ways, is pretty much zero by the time you’re talking about 2030. Almost all EVs on the road today are already computers which know precisely what roads they are driving and where they are getting all their electricity. It’s just a question of software for them to make use of that to calculate road usage and taxes.
Some options on the table include:
- A car can trivially maintain a sub-odometer per state, allowing fees to be divided up by what state the car drives in.
- This could (dangerously) go even further, breaking down by road type or even road, but this has privacy concerns, and was never possible with gasoline, so is not necessary.
- Taxes could be based on vehicle weight, since road damage is proportional to the 4th power of weight. Because of that, cars do almost none of the damage. EVs do weigh more than equivalent gasoline cars, but this should not be done without a similar tax on big SUVs and trucks of high weight in the fossil department.
- Public fast chargers all do billing now, and could collect road taxes when they dispense electricity just as gas pumps do it for gas. Cars can know when they are charging at home or at non-communicating chargers to record an odometer for that. However, some cars come with free fast-charging which may be impeded if road fees must also be paid.
To protect privacy, states could by default require a “high average” usage per year. Any owner who reported their actual usage could use that to pay less. Otherwise they could pay (or receive back) the difference after events like selling the vehicle or irregular inspections. For any car, gasoline or electric, an odometer read when selling the car or registering it in another state could account for road usage and levy taxes.
Raising gas taxes
It has often been felt that the best way to account for the external costs of burning fossil fuel would be to raise fuel taxes, in this case, not just for funding road repair. Even though this is the norm in most countries of the world, it has been viewed as politically impossible for any politician to propose raising the price of gasoline.
The transition to electric changes that, however. Indeed, if a state like Washington moves on the path to banning gasoline cars, as this bill did, clearly over time the number of gasoline drivers would drop to a point where more taxes on the fuel are not just doable but a popular idea. In an ironic twist, if you had European style high taxes on gasoline, there would be limited need to actually ban sales of the cars. Who is going to buy a gasoline car that costs 30 cents/mile for fuel over a faster, more reliable car that costs 4 cents/mile? A few, but not too many.
Of course, lower income people, not able to rush out and buy new cars, would still be stuck with gasoline cars, but by 2030 a large supply of used electrics would be available. However, the new gasoline cars will be just as computerized as the electrics are today, able to have smart odometers which know where they bought gas and how much, and what states they drove. A requirement that new gasoline cars pay an extra road use tax the same way EVs do — on top of the more slowly rising gasoline tax — would discourage their purchase without needing to ban them.
The core message is this — the cars of 2030 are capable of far more than old cars, and in fact even the cars of 2021 are up to the task of finding privacy-protective ways of charging people for the amount of use they make of the roads in a way similar to the way gasoline taxes do. At the same time, some would argue that road maintenance is better to come out of general revenues, rather than from a user fee, which solves all the problems as well. Indeed, while often gasoline taxes officially are for the road budget, in reality they sometimes just to into general revenues anyway.
