Your Letters for Jan. 31, 2025
What is going to replace the gas tax?
Guess what — thirteen states give drivers an incentive to buy an electric vehicle — before charging them extra for it. Will EV’s pay their fair share to replace this tax?
Some ideas getting tossed around to cover the gas tax and its problems:
Pennsylvania — Adding a $250 annual fee to them. But the EV fee would raise $30 million, however, now the annual transportation spending is $8 billion.
New Jersey — Sales tax on EV’s, and registration fees.
Thirty-nine states are now charging an annual fee for EV or Hybrids.
States will have adjustments to EV’s to make up for lost gas taxes. Louisiana is charging $110 a year for EV and $60 for hybrids.
New Jersey requires drivers to pay first 4 years of registration up front.
Texas collects more money from EV taxes than they got from the gas taxes, and 12 other states are doing this now, plus a $200 annual register fee. More than half of the states have similar fees on the books.
Washington, one of the highest EV states, is looking at a retail delivery fee.
Some states are considering a vehicle tax on miles traveled, Vermony! Some states charging a 1.8 cent a mile fee. How to monitor?
EV user fees range from $50 to $235 a year.
Americans paid $78 Billion in gas taxes in 2023-2024? That is $215 million a day.
Everyday Americans spend $215 million on federal/state/local taxes on gas.
One major group is suggesting that taxing all vehicles per mile is a more equitable way to collect revenue for the fund.
One state offers drivers who drive less than 11,600 miles per year to pay less than those who drive more.
Replace per gallon excise tax with per mile charges.
State gas tax revenues will fall 30%-50% by 2050.
The fuel tax numbers — The fed has not increased its 18.4 cent gas and 24.4 cent on diesel portion of the tax since 1993. States on average are charging at least 32.44 cents/gal. California is the highest in the nation at 86.55 cents/gal, while Missouri is 38.3 cents/gal. Fuel taxes make up 38.4% of state transportation budgets in 2022, down 41.1% in 2018. States will lose up to $87 billion by 2050 as more drivers go green.
While inflation has increased 111% from Oct. 1993 until Dec. 2023, the highway revenue department has lost billions over the last decade due to fuel efficient EV’s. A lot of states are pivoting to user fees while raising the gas tax.
Even with these new ideas, it will not be enough to match the gasoline tax. The last tax increase was in 1993. Gas cars are getting better mileage so they are not paying as much in gas taxes. Plus, will there be enough recharging stations in place to handle the demand?
Why do we need a gas tax or something to replace it? To repair or replace bridges, highway wear, as EV units weigh more than gas cars/trucks, as 75% of the funds comes from this tax. Louisiana drivers average $148 in gas taxes, but still they are $14.8 billion in deferred transportation funds and have 13 bridges closed.
Goals/target for EV’s — N.J. at 185,000 and wants 300,000 by 2025 — bam! A 2021 report: 90% of vehicles on the road are gas powered, 3% are diesel powered. The governor estimates that in 2040 — 78% of cars/trucks will still be gas.
What do you get from Uncle Sam if you buy one today? Good old Biden has allocated billions of dollars to finance EV production and charging stations — your tax dollars, because its climate friendly!
Thirteen states offer money to buy an EV. New Jersey offers $2000 subsidy for low-income buyers. The government is trying to buy you into the EV units, but you must decide if it’s best for you. More on this later.
Ben Pecora
St. Joseph
