LANSING, Mich. — State leaders are sounding the alarm after a recent report indicates the rising use of electric vehicles may negatively impact state revenue.
On Tuesday, a newly-formed coalition met and delivered a news conference at the Capitol, to discuss a recent report focusing on the ways in which electric vehicle adoption specifically affects road funding.
Coalition members come from county road agencies, as well as governmental and industry stakeholders, according to a press release.
"The Impact of Electric Vehicle Adoption on Road Funding in Michigan" was recently completed by Anderson Economic Group and analyzed the years 2019-2021.
The report posits that, because electric vehicles pay no or reduced gas tax, Michigan lost $50 million in state gas tax from 2019-202.
Furthermore, the report also suggests that electric vehicles could soon make up nearly a quarter of all new vehicle sales in Michigan by 2030.
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Leaders say the more electric vehicles on the road, the less gas tax in the state's coffers. Potentially, the state could see its revenue drop by $95 million in 2030.
The coalition says this drop would be more likely to happen if policy conditions stay the same till 2030. Now, leaders are asking legislators to take action sooner rather than later.
“Michigan put the world on wheels, and 100 years later we continue to lead the world into a new and exciting future for mobility. But we need to act now to ensure we have the road funding needed to drive that future,” said Denise Donohue, CEO of the County Roads Association of Michigan. “That’s why we are calling on lawmakers and the Governor to launch a pilot project that gives us the answers we need about a future-forward road funding model for EVs.”
Coalition members say they're pushing for Michigan to implement new programs that would fairly tax electric vehicles.
They recommend annual flat registration fees, mileage-based user fees, per kilowatt-hour fees, and tolling as alternative strategies for taxing electric vehicles.
“For decades, Michigan has been underfunding necessary fixes for our roads, and with the rise of electric vehicles, the revenues necessary for road projects collected at the gas pump will continue to decline,” said Rob Coppersmith, Executive Vice President of the Michigan Infrastructure and Transportation Association. “We need action from Michigan’s leaders to rethink how we fund our roads and it’s time for everyone to come together to support an equitable, long-term infrastructure plan that recognizes the new realities Michigan faces.”
To read more about the report, click here.
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