Electric vehicles could impact state gas tax revenue

Despite the good electric vehicles do for the environment, it might not be doing as much good for Missouri’s infrastructure.

Posted: Jul 19, 2018 7:57 AM
Updated: Jul 19, 2018 3:31 PM

(St.Joseph,MO) Despite the good electric vehicles do for the environment, it might not be doing as much good for Missouri’s infrastructure.

Marty Lilies, Assistant District Engineer for the Missouri Department of Transportation (MODOT) said Missouri has the seventh largest road system in the nation.

Missouri has the seventh largest road system in the nation. 

"If you were to take and add up Iowa, Nebraska and Kansas, all the miles of roads they maintain and combine them, we actually maintain more roads in our state than the three of them combined," Lilies said.

Despite Missouri’s large road system, the state is still ranked 46th in the country for revenue per mile.

"Right now we have less fuel consumptions with the revenue mechanism we have," Liles said."We get a 17 cent gas tax from the state and with that it's based off of fuel consumption. Any time the gas consumption goes up, we get more revenue, the gas consumption goes down, we get less revenue.”

As more people make the switch from traditionally fueled vehicles to electric vehicles, it could start having a bigger impact on Missouri’s gas tax revenue. Last year Kansas City lead the nation with an 78 percent growth in the number of people switching to electric vehicles.

Registration fees and vehicle sales tax contribute to MODOT’s budget, but the gas tax is the largest funding mechanism for the department, bring in $699 million in revenue during fiscal year 2017.

The Kansas City Power and Light Company (KCP&L) is making a big push for electric vehicles and clean energy in Missouri. In 2015 KCP&L made a pledge to install over 1,000 charging stations to their service area by launching their Clean Charging Network.

KCP&L’s initiative brought in 53 charging stations at 24 different locations throughout St. Joseph, as well as 260 charging stations in smaller communities outside Kansas City metro area.

KCP&L Community Business Manager, Dan Hegeman, said the program is making electric vehicles more accessible in rural communities.

"We have over 3,000 different energy vehicle customers that are unique and specific that utilize these services and it's growing at a great rate throughout the nation," Hegeman said.

Electric vehicles are marketed as a more environmentally friendly driving option.

In order to promote green cars, some employers like Missouri Western State University do not charge for the use of their charging stations.

“You’re reducing the ozone pollutants out there as well as carbon dioxide pollutants coming out of the tail pipes with good, clean electric vehicle energy,” Hegeman said.

Fast charge systems can charge vehicles in as little as 20 minutes, but other systems require the vehicle to be charged overnight, optimizing the use of the electric grid.

“Typically these vehicles are charged at night, when it is off-peak period. So it makes for a better utilization of our grid. Which spread the cost out over a larger group of customers and helps lower that cost for everybody,” Hegeman said.

Currently drivers of electric vehicles do not contribute to Missouri’s gas tax, but instead are required to pay for an alternative fuel decal when registering their vehicle.

"There are different aspects of taxation on it. Different states have different aspects of taxing electric vehicles, trying to have an equivalent to the fuel taxes they may charge," Hegeman said.

There are several factors that impact how well these decals stack up against contributions from the gas tax, including the type of vehicle being driven and the vehicles fuel consumption.

For example if a passenger vehicle gets 20 mpg and the owner drives the national average 13,474 miles in a year, they would pay $114.50 annually towards the state gas tax compared to the $75 alternative fuel identification sticker for electric vehicles or the $37.50 sticker for hybrid vehicles.

“As we eventually evolve into the next innovation of technology is, if that does get to be the increased amount of electrical cars that we have on the road ways, then the legislation is going to have to talk and have a discussion about how we are going to fund transportation needs,” Lilies said.

In November, Missourians will get the chance to vote on a potential change gas tax, increasing the tax by two and a half cents every year for the next four years.The potential increase could boost the states revenue by $123 million annually, but there have been no suggested changes to the electric car decals to match the potential gas tax increase.

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