The EV taxation debate comes to Michigan
GM voices opposition to taxing green cars
LANSING, Mich. -- Can a road tell the difference if an electric vehicle or a gas guzzler is driving over it?
No, but lawmakers around the country tasked with coming up with a new revenue stream to pay for the upkeep of those roads sure can. And they are looking for the owners of those vehicles that guzzle so little gas to pay a little more.
The debate is well under way in several states. Now Michigan, home to the U.S. auto industry, is considering such a move.
Michigan Gov. Rick Snyder wants $1.2 billion more per year for transportation funding, and his plan would reconfigure the gas tax and increase registration fees.
The House Transportation Committee met last week to debate the issue. Discussions included whether to create a new tax on electric and hybrid vehicles, the theory being that much of the money to maintain and fix the state's roads comes from taxes at the pump, and if certain vehicle owners have found a way to not show up at the pump as often, they still need to pay their fair share.
But General Motors Co. says that's not fair -- not to the customers or the manufacturers and suppliers that build those vehicles, their parts and the electric batteries.
Brian O'Connell, regional director of state government relations for GM, said a $75 annual fee on those vehicles, as proposed in HB 4632, could inhibit market growth in an industry that is still trying to get a foothold.
The number of electric and hybrid vehicles on Michigan roads is relatively small. Last year, there were 2,663 electric vehicles and 7,669 hybrid vehicles registered in the state. GM and the makers of other brands of more fuel efficient vehicles want to see those numbers increase but feel this fee will dissuade people from purchasing them.
O'Connell also argued that on one hand the government and consumers are asking auto manufacturers to produce more fuel efficient vehicles, but on the other hand the government wants to penalize them for doing so with proposed fees like this.
"We do not believe our manufacturers and customers should be penalized for doing what's right," he said.
The small amount of revenue in the big scheme of things is not worth the risk that having such a fee would do to the market, he said.
That argument seemed to make sense to the chair of the committee, Rep. Wayne Schmidt, R-Traverse City.
He told me the amount and possibly the structure of assessing the fee is going to change when it comes up for discussion again next week.
"We certainly don't want to discourage (the industry)," especially one that is centered in Michigan, Schmidt said.
Gov. Rick Snyder feels much the same way.
"In some ways, we don't want to discourage people looking at alternative fuel methods," Snyder said. "I would just have concerns. The goal here isn't to necessarily make it a disadvantage compared to traditional fuel mechanisms, because in a lot of ways I think we want to encourage more self-sufficiency."
What are other states doing?
Michigan would not be alone by going after electric vehicles in exploring new ways to pay for the roads. According to data compiled by the National Conference of State Legislatures, so far this year, at least eight states, including Michigan, have introduced bills to create taxes or fees on such vehicles.
Three states -- Nebraska, Virginia and Washington -- have already enacted the new taxes, according to the NCSL. The taxes range from $100 annually in Washington to $75 in Nebraska and $64 in Virginia.
Without doing something similar, Michigan roads will continue to deteriorate, lawmakers agree. Rep. Marilyn Lane, D-Fraser, the minority vice chair of the committee, said crumbling roads won't help GM or anyone else sell their vehicles.
The $75 annual fee is just one of the many types of registration fees the committee is considering. Drivers of traditional cars and trucks could see increases, as would farmers, motorcycle owners, heavier commercial vehicles and owners of historical vehicles, to name a few.
Schmidt is still hopeful to vote on a finished product before lawmakers leave for their summer break near the end of the month. He said he's hopeful this bill, and others associated with it, can be reported out of committee Tuesday, but, he pointed out, it was his hope they were going to vote them out this week.
He said: "We'll see."
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