Gian-Claudia Sciara and Andrew Waxman: It’s time for electric vehicles to pay their share for Texas highways

(Gian-Claudia Sciara is an assistant professor of community and regional planning at the School of Architecture at the University of Texas at Austin. Andrew Waxman is an assistant professor of economics and public policy at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.) Texas House Bill 427 proposes a constructive adjustment to state transportation funding. Lawmakers would be remiss not to make it. The bill would establish an annual fee, in addition to registration, for electric ($200) and hybrid ($100) vehicles. The fee boosts state transportation revenue somewhat in the near term, but the long-term significance is far greater given the seismic changes underway in how we get around. It takes about $6 billion each year to keep Texas moving. That’s how much the Texas Department of Transportation spends on the most conventional highway projects in the state’s transportation improvement program, and the cost multiplies quickly when nontraditional road projects, operating costs for the department, and metropolitan and rural transit systems are included.

Per-gallon motor fuel taxes paid by road users historically have covered a good chunk of those highway costs. But the state gas tax has been stuck at 20 cents per gallon for 30 years. Gas tax revenue also cannot keep pace with vehicle use and rising highway construction costs. As cars and trucks grow more fuel efficient and electric vehicles become more popular, per-gallon tax collections shrink relative to miles driven on Texas roads. Ideally, legislators would raise the state gas tax to answer these trends. Instead, they won approval to divert state sales tax and oil and natural gas production (severance) tax revenues to supplement road funding. Those taxes are not road user fees, and both support other important public purposes including K-12 education, the rainy day fund, and general fund expenditures such as health and human services. The bill, introduced by state Rep. Ken King of Hemphill, will help to recoup infrastructure costs from hybrid and electric vehicle drivers who currently pay little or no gas taxes. Projected near-term revenues are about $55 million, according to the Legislative Budget Board, but that number will grow with Texas’ electric vehicles usage. In mid-2022, the Ford F-150 — one of Texans’ favorite vehicles — will hit the market in electric form, and Tesla’s Gigafactory could produce cars before year’s end.