FOR IMMEDIATE RELEASE
March 16, 2021
Matt Frommer, SWEEP
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Kevin Emerson, Utah Clean Energy
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[SALT LAKE CITY, UT] – Last month, Utah House Bill 209 (HB209) was voted down on the House floor, with a vote of 27 for and 44 against. The Utah Legislature’s proposal in HB209 would have drastically increased annual fees on electric vehicles (EVs), plug-in hybrid, and hybrid vehicles. EVs have zero tailpipe emissions, making them a key solution to Utah’s climate and air quality challenges, so fighting off a fee increase to $300 per year is an enormous victory for the state and the environment.
Today, we pay for roads primarily through gas taxes paid at the pump. The amount of money the gas tax provides every year is declining, mainly because the fuel efficiency of vehicles is going up, and the buying power of the dollar is going down with inflation. New gasoline vehicles get 30.6 mpg today, which will rise to 36.2 mpg in 2025 because of federal CAFÉ standards, so owners of gasoline vehicles are buying less fuel and paying less into the system every year. EVs are a miniscule factor – even if Utah doubled the number of EVs on its roads this year, from 12,000 to 24,000, it would only reduce total motor fuel tax revenue by one-tenth of one percent. An excessive EV fee would have failed to raise money, but it would have also created a disincentive for Utahns to replace their gas cars with cleaner and more efficient EVs.
The method used to calculate the fees in HB209 was flawed and failed to recognize that Utahns driving EVs already pay $120 in additional annual registration fees to build and maintain Utah’s transportation system. The disproportionately high EV fees proposed in HB209 also don’t actually address the primary reasons the gas tax isn’t keeping up. We need a new, long-term solution for paying for Utah’s roads.
The current gas tax is structured so that less efficient (and more polluting) vehicles pay more in gas tax because they use more gasoline, while the more efficient (and less polluting) vehicles pay less. This incentive for efficiency is valuable and should be preserved. If Utah taxed EVs as if they drove on gasoline using the EPA’s “miles per gallon equivalent,” a Nissan Leaf driving the average annual miles driven in Utah (13,884) would pay only $40 per year.
All Utahns should be able to access clean EVs – which is increasingly possible as used EVs enter the market and the costs of EVs come down. The proposed EV fee was also a poor choice because the $300 per year fee would have been collected as a lump sum, which would have been especially burdensome for low-income drivers, because it does not spread out costs over time like the gas tax.
Utah policymakers are wrestling with the state’s transportation funding challenges. “We need to create a transportation system that cuts down on air pollution by ramping up EV adoption and expanding transit, biking, and walking options for all Utah communities,” said Matt Frommer, Senior Transportation Associate with the Southwest Energy Efficiency Project. “The fees in HB209 would have undermined these goals. Let’s not overtax the kinds of zero emission vehicles our communities need to improve Utah’s air quality.”