Republican leaders of the Minnesota House released a plan Tuesday that would spend $2 billion improving the state's roads and bridges over the next two years.
A key selling point in the House GOP transportation bill is that – unlike the approach favored by Gov. Mark Dayton and his fellow DFLers – it would not raise your taxes or fees. Unless you drive an electric vehicle.
As Session Daily reports, the plan includes a $75 annual surcharge for owners of electric cars. That would generate just a small piece of the $2 billion in new money, most of which would come from borrowing or by moving existing tax money from the general fund to roads. DFLers say a gas tax increase would provide a longer-term source of revenue to keep roads in good shape.
Why a fee for electric cars?
A lot of the money that Minnesota uses to build and maintain its roads (45 percent of it, according to one analysis) comes from the state's gas tax.
People who drive electric cars don't buy gas, so they don't pay that tax. A surcharge on electric vehicles is seen as a way for those drivers to share in the cost of maintaining the roads they use.
Other states are doing it. Forbes says there are now 10 states charging electric car owners an annual fee.
The New York Times reports there's some concern that charging those fees will discourage people from buying electric cars, which are sometimes called Zero Emission Vehicles because they don't add to air pollution. Georgia saw electric car sales drop from 1,300 one month to 97 the next when they got rid of a tax break for electric car owners and started charging a $200 registration fee, the Times says.
Study: Electric car owners pay more in taxes
The group Drive Electric Minnesota maintains that electric car owners already pay share of road maintenance through higher taxes on their pricier vehicles.
Their study found that since electric cars cost more than gas-powered vehicles, buyers pay more in sales taxes when they make the purchase. They also spend more when they buy tabs every year because that cost is based on the value of the car (for the first 10 years, anyway).
It's not like there are a whole ton of electric cars on the road. Midwest Energy News says there are fewer than 4,000 in Minnesota.
Sales are increasing, though. Forbes says they were up 37 percent last year. According to Inside EVs.com last month's total set a new record and they're up to 0.9 percent of total vehicle sales in the U.S.