Pennsylvania looking to charge electric vehicle owners a $290 annual fee

Pennsylvanians who own electric vehicles may soon be required to pay an annual fee to help pay for road and bridge improvements.

The Senate Transportation Committee on Wednesday approved a bipartisan-backed bill by a 13-1 vote that would charge owners of non-commercial passenger electric vehicles a $290 fee annually — or $24.17 in monthly installments. It also would exempt them from paying an alternative fuels tax but would maintain the alternative fuels tax at public charging stations.

The yearly fee equates to roughly to what the state Department of Transportation estimates owners of gas-powered vehicles pay each year in the state’s gas tax at its current rate of 61 cents per gallon, among the nation’s highest. Revenue from the gas tax goes into the state’s Motor License fund that pays for highway infrastructure projects and supports state police operations.

“It’s time for electric vehicles to pay a portion of that as well,” said committee Chairman Wayne Langerholc, R-Cambria County. “Each day that we wait to tackle this issue it’s a day that we leave money on the table.”

The bill now goes to the full Senate for consideration. The House Transportation Committee, meanwhile, also is studying this issue. Its chairman, Rep. Ed Neilson, D-Philadelphia, said it is a high priority issue for the committee and he is working with his Senate colleagues to arrive at a consensus on how to deal with this evolving area of electric vehicles to place a bill on Gov. Josh Shapiro’s desk.

Over the past four years, Pennsylvania has seen the number of electric vehicle registrations rise from 9,784 to 66,564 as of March, Langerholc said. That number continues to grow as more auto manufacturers expand the number of battery electric and hybrid electric models and government-funded rebates to help cover their big price tags are offered.

At $290 a year, Pennsylvania would have one of the highest annual electric vehicle fees among the 33 states that levy one. Texas last month enacted a law that requires its residents to pay $400 the first time they register their electric vehicle and $200 every year thereafter. Langerholc pointed out some states charge an annual fee as well as one based on miles driven.

Sen. Greg Rothman, R-Cumberland and Perry counties, who is listed as the bill’s sponsor, said the flat fee is simpler than the alternative fuel tax that Pennsylvania has in place. It requires electric vehicle owners to file monthly statements with the state Department of Revenue and pay a tax on how much electricity their vehicle used. Because it’s complicated, he said few people pay the tax or were even aware they were supposed to pay it.

“People that drive electric vehicles want to contribute to the roads and bridges and this allows them to do it in a much more efficient way,” Rothman said. “If we’re going to ask people to pay taxes, we ought to make it easy enough for them to do it.”

Like the gas tax, revenue from the proposed electric vehicle fee would roll into the Motor License Fund.

Langerholc estimates the fee initially would generate about $20 million a year, far short of the $9 billion in additional funding that PennDOT said is needed to keep the state’s roads and bridges in good repair. But he said with this legislation, “we set the tone for proper funding of our Motor License Fund.”

Sen. Marty Flynn, D-Luzerne County, agreed electric vehicle owners should pay their fair share for the maintenance and improvement of the state’s transportation infrastructure and do so in a way that is reasonable, transparent and equitable. He said this legislation accomplishes that.

“We as policy makers must strike the right balance between supporting the growth of the EV market and generating sufficient revenues to fund infrastructure development,” Flynn said. At the same time, he said, “it is crucial to encourage the widespread adoption of EVs and not deter potential buyers with excessive burdensome charges.”

The lone dissenting vote cast by proxy at the committee meeting was from Sen. Lindsey Williams, D-Allegheny County. Williams said afterward, that national experts who testified at a hearing the committee held on this issue in Pittsburgh “stressed the importance of striking the balance between making sure EV owners pay their fair share for the wear and tear on the our roads while also keeping EV’s affordable for the sake of both our environment and our economy. The fee in this legislation — I believe one of the highest in the country — did not strike that balance.”

Langerholc said he knows the bill is not perfect but to wait to iron out the multitude of issues surrounding electric and hybrid vehicles “would only delay action forever and we cannot do that. The residents of this commonwealth and those that use gasoline vehicles cannot continue continually get asked to shore up the enormous burden of funding our critical roads and infrastructure.”