Rise of electric vehicles threaten funding for Ohio highways
Cleaner air and less pain at the pump may sound good to many, but the rise of electric powered vehicles poses a problem for the Ohio Department of Transportation.
As vehicles become more efficient and getting better gas mileage, an increasing number of vehicles don’t require any gas at all.
Since Ohio’s fuel tax is the primary source of funding for road and bridge maintenance in the state, fewer gallons of gas pumped mean fewer dollars for ODOT.
That’s why ODOT is asking members of the public to help them find ways to reverse a trend leading to an anticipated annual $635 million funding gap by 2040.
ODOT is asking Ohioans to fill out an online survey at www.OhioRoadFunding.com to share their opinions and concerns.
In addition to fewer dollars available for roadway improvements, drivers of electric vehicles aren’t paying the same share of the cost of road funding as those who own gas powered cars and trucks.
Declining gas tax revenue is further complicated by rising construction costs to maintain and improve roads and bridges are also increasing, according to ODOT.
Fuel consumption is expected to drop 40% by 2040 as electric vehicle adoption by Ohioans is expected to rise 30%
Seventy percent of ODOT’s revenue comes from Ohio’s fuel tax, which is currently, 38.5 cents per gallon for gasoline and 47 cents per gallon for diesel.
Vehicle registration fees are the second largest transportation funding source for Ohio. For passenger vehicles, the annual renewal fee is $31. In 2019, Ohio imposed an additional annual fee of $100 for hybrid vehicles and $200 for electric vehicles.
All-electric vehicles do not pay gas tax since they don’t use gas. However, in Ohio they do pay a $200 a year registration fee that goes into the transportation fund to help pay for the cost of road and bridge maintenance. This $200 fee is in addition to the $31 that every vehicle owner pays to register each vehicle they own.
In Ohio a hybrid engine vehicle owner pays an additional $100 registration fee to cover the cost of road and bridge maintenance on top of the $31 registration fee.
27% of the money used to maintain and expand Ohio’s roads and bridges comes from those vehicle registration fees and 3% comes from other revenue sources like the state’s general fund.
Several states across the U.S. are studying alternative funding options as gas tax revenues continue to decline. Oregon, Utah and Virginia have voluntary mileage-based user fee programs for high-fuel efficient and alternative fuel vehicles in lieu of paying additional registration fees.
The information collected through the research effort will be developed into a report that will be presented to the Ohio General Assembly late this spring. It will be up to the legislature to introduce any new funding option.