EV Titles Get Changed to Reflect Fuel Type in PA

Looks like the first step in paying more to drive an Electric Vehicle (EV) in Pennsylvania. The current $39 registration fee could be a thing of the past.

The Official Notice, along with a new Title, arrived in the mail Friday:

Pennsylvania needs help funding roads and bridges, due to shortfalls.
Fair is fair, as long as whatever fee system they create is actually “fair.”

BACK OF THE NAPKIN CALCULATIONS
If Pennsylvania’s July 2021 TROC Report is any indication, I would guess the state’s first step will be increasing the next annual registration fee for our Chevy Bolt from $39 to $275. But for there to be equity, the new annual registration fee shouldn’t be more than $160 for a Bolt EV, if the increase is only to make up for unpaid Pennsylvania gasoline tax revenue of 59-cents per gallon. (To make up for 77-cents in state and federal gasoline taxes, using the same 23 miles-per-gallon as a reference, would amount to a $210 Registration fee).

That $160 to $210 Registration fee might constitute “fair” (or maybe even as high as $175 to $225 –since EV’s are heavier and cause more road wear). But in addition to that Registration fee hike, there could be a “Mileage-Based User Fee (MBUF)” of 8.1-cents per mile levied, not only on EV’s, but on every passenger vehicle. Having driven our Bolt an average of 6,250 miles per year, that would amount to an additional $506.25 per year.

Adding that $506.25 MBUF to a new $275 EV registration fee would total $781.25 and amount to 12.5 cents per our average annual mile, even before considering the cost of electricity to charge our Bolt. With purchased electricity at home currently costing about 12.5 cents per kWh, that would boost our travel cost to 25 cents per mile, from the current 2.5 cents per mile, amounting to a 10-fold increase!

That certainly wouldn’t encourage many Pennsylvania drivers to transition to EV’s.

Will your gasoline-powered vehicle get M-BUF’ed too?
Transportation Revenue Options Commission (TROC) Report

July 30, 2021 – The Transportation Revenue Options Commission submitted its final report to Governor Tom Wolf on Friday, July 30, 2021. This strategic funding proposal aims to address the acute transportation funding challenge facing the Commonwealth now and into the future. Source

“Inaction is not an option. The Commonwealth must modernize and restructure its approach to transportation funding for the long term, while rapidly adopting near- and medium-term changes. While the gas tax that funds Pennsylvania highways and bridges is eroding as a revenue source, the Mileage-Based User Fee (MBUF) approach presents the most promising long-term solution in Pennsylvania and nationally for aligning transportation revenue with the needs of the system. Pennsylvania’s particularly heavy reliance on declining gas tax revenues makes the need for action on this proposal urgent.”

Yassmin Gramian, P.E., Chair, Transportation Revenue Options Commission Secretary, Pennsylvania Department of Transportation
STORY: Pennsylvania Considers the Equivalent of a $2 Per Gallon Gas Tax

The report includes several new or increased taxes on different industries. For instance,

  • increased tolling,
  • a $1.10 tax on ride hailing and taxis,
  • doubling of car registration taxes,
  • more than doubling of vehicle rental taxes from $2 to $5,
  • increasing of vehicle leasing taxes from 3 percent to 5 percent,
  • an electric vehicle fee of $275,
  • and most notably, a goods delivery fee of $1.

A vehicle miles traveled (VMT) proposal gaining steam in Pennsylvania would be the equivalent of a state gas tax of more than $2 per gallon, and that’s not all the Commonwealth is considering. This change makes sense, at least in the abstract, as the gas tax efficiency as a proxy for road use has declined with improvements in fuel economy and growth in sales of electric vehicles. The mileage-based tax would be 8.1 cents per mile and would raise just shy of $9 billion a year when the system is established. To put that in perspective, model year 2020 light-duty vehicles (cars, pickups, SUVs, and cargo vans) average 25.7 miles per gallon, meaning that an 8.1 cent per mile tax on the average 2020 car would be equivalent to a gas tax of $2.08 per gallon—almost four times the current state rate of 58.7 cents per gallon, and over three times the nation’s highest current rate (66.98 cents per gallon in California).

Ulrik Boesen | The Tax Foundation | August 3, 2021
STORY: Here’s where Pennsylvania gas tax revenue is going

Pennsylvania has one of the highest gas taxes in the country. Drivers pulling up to the pump are paying 77 cents in tax per gallon. Most of it is state tax – 59 cents per gallon. Only California and Illinois have higher state gas taxes. PennDOT says the funding is not enough. Most of the revenue from the tax goes towards roads and repairs on the state’s 25,000 bridges.

Gas tax revenue and motor license fees bring in $4.5 billion, but only $2.7 billion goes to roads and bridges. The rest goes to Pennsylvania State Police, Driver & Vehicle Services and the Pennsylvania Turnpike. Roughly about 40% of the gas tax is going to those other agencies or outside of the department. As vehicles on Pennsylvania roads become more fuel-efficient, drivers are buying less gas. That means there’s less gas tax revenue. It’s a revenue stream that is simply not sustainable, according to PennDOT. That problem has prompted the proposal of a tax on vehicle miles traveled.

Brian Roche | WGAL8 | February 8, 2022

It’s far past time to put a severance tax on all the shale gas being extracted from beneath Pennsylvania… it could be earmarked for roads and bridges!

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