When should changes to highway system funding be enacted

Many say it's too early right now to make changes, because there aren't enough EV's on the road yet.

It's widely recognized changes must be made to the transportation system funding (see What's problem electrified vehicles cause for highway funding), and widely recognized electric vehicle owners must eventually start paying their fair share of the transportation system expenses. But when is the best time to make those changes?

Because electric vehicle drivers currently do not pay any sort of tax on their driving, it acts as an incentive supporting electric vehicle adoption. There is a wide ranging agreement among electric vehicle owners and advocates that it is too early to begin collecting extra taxes on electric vehicles, and that a tax runs counter to the electric vehicle incentives. Additionally it's widely thought the current electric vehicle deployment is too small to collect much money, or to warrant developing a system at this time. Everyone is in agreement that taxes must be collected eventually, when the time is right.

GM's Shad Balch stated in response to an electric car tax proposal "We strongly oppose a tax on E.V.'s. We can't provide customers an incentive from one hand and then take it back with the other. At some point, E.V.'s will need to pay their fair share for road maintenance, but it's too early, and any cost increase to the consumer will hurt sales and slow market adoption." (see Road Use by E.V. Drivers: To Tax or Not to Tax?)

The Plug-in Electric Vehicle Collaborative, an advocacy group in California, published a position paper on these issues titled PEV Collaborative Transportation Funding Consensus Statement, in September 2012. They wrote "While all road users should contribute to the transportation system, singling out electricity for new taxation will do little to solve the nationwide transportation-funding shortfall and could undermine the adoption of clean vehicles that reduce emissions and dependence on oil." The paper went on to note four principles we should keep in mind:

1. Transportation system revenue losses due to vehicle electrification will remain negligible through this decade.
2. Taxation that singles out electricity as a transportation fuel over other alternative fuels is inappropriate.
3. Unlike gasoline or diesel, electricity used as a transportation fuel is generally subject to local utility taxes that fund local services, such as fire departments and local road maintenance.
4. Resolution of the overarching transportation funding problem should treat all vehicles and fuels equitably and should continue to encourage reductions in petroleum consumption and pollution, and increases in energy efficiency.

The NRDC's Max Baumhefner, a Legal Fellow in their Energy Program, said in a telephone interview that the NRDC is writing a policy paper, and that it should be published later in 2013. The NRDC's policy position is very similar to that of the PEV Collaborative. He stressed the development of a comprehensive transportation system funding solution rather than just a quick fix.

Jay Friedland, Legal Director of Plug-in America, described PIA's position in similar terms, giving three specific points:

1. EV drivers should pay their fair share of road taxes.
2. EV drivers are not a significant cause of road tax shortfalls, if only because their numbers are still fairly small. We should phase in plug-in road taxes after, perhaps, 100,000 vehicles per state or by some date, eg: 2020.
3. A flat EV tax is just as unfair as a flat gas tax would be. And it doesn't address any of the other causes, or other alternate fuels. A better solution is a weight-adjusted mileage tax for all cars, regardless of propulsion. The best solution would be a road tax based on VMT and weight.

The Rand Corporation has published what they call a Primer titled Mileage-Based User Fees For Transportation Funding, which lays out a strong case for a miles-driven based tax on all drivers. They propose a laundry list of potential benefits that would require a comprehensive list of policies. The benefits include

• Reducing traffic congestion by varying the per-mile tax on the time of day
• Reducing road wear, by making heavy trucks pay a higher per-mile tax
• Reducing pollution, by making more-polluting vehicles pay a higher per-mile tax
• Pay-as-you-drive automobile insurance
• Automated parking fees payment
• Automated toll collection on bridges or toll roads
• Location dependent travel services
• Internet connectivity as a side benefit for vehicle passengers
• Improved vehicle safety, if implemented along with connected vehicle systems currently being developed

The RAND proposal to vary the per-mile tax on the time-of-day would only increase Big Brother fears (see "Big Brother" concerns with collecting vehicle miles traveled taxes).

The report notes four methods to mitigate those concerns:

• Measure miles traveled without recording the location
• Use a trusted third party to securely protect private data
• Designing the technology with built-in privacy safeguards
• Establishing privacy legislation that clearly distinguishes between permissible and impermissible uses of personal travel data.

The paper goes on to note that the privacy concerns over "The government is tracking where I drive, and I don't like it," are the biggest barrier to adoption of mileage based vehicle taxes. They recommend the following implementation steps, with an eye to mitigating privacy concerns.

• Conducting trials and educational outreach, and to include government officials in those trials
• Enrolling privacy watchdogs and other stakeholders in the planning
• Begin with a simple odometer-based system rather than jump directly to the GPS based monitoring over cellular data systems
• Provide drivers with a choice of systems to measure miles driven
• Focus initially on alternatively fueled vehicles
• Provide an option for a flat fee rather than one based on miles driven