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Electric Vehicles, Hybrids and Bicycles Need to Pay Their Share

Posted in Clean Energy, Electric Vehicles, Fuel Efficiency, Tax

I am a huge fan of plug-in hybrid and electric cars. I bought a plug-in hybrid in early January and have filled its tank twice now. The last time was a couple of weeks ago and since then I’ve driven 250 miles on about three gallons of gasoline. I think everyone should have one; although, as I’ve written, I think we need to get our electric rate structures figured out so that owners of plug-in electric vehicles have every incentive to charge overnight and not during peak demand periods. This car meets all my goals of saving gasoline when I need to drive long distances to places without charging stations. Mostly, it takes me back and forth to work, or around town, with energy from the hydroelectric dams Seattle City Light operates.

Recently, I’ve been having a debate with one of my partners, who bikes to work, and who is incensed that a key current transportation funding bill in the Legislature would impose a $25 excise tax on the purchase of a bicycle costing $500 or more. My response is that we need to tax all bikes and we need to increase the tax on electric vehicles and hybrids. She says I get credit for consistency, but she’s not buying it. She makes some valid points about the tax falling mostly on independent bike shops, while the major discount stores can sell bikes for less than $500. She also makes a valid point that far more bicycle infrastructure is needed than a $25 tax on new bikes will pay for, although I’m not quite sure why the fact that the tax won’t raise enough money to do what is needed is a reason not to have the tax.

Really, the bottom line is that we need to be taxing all bikes, electric vehicles and hybrids. We have a huge transportation funding deficit and all users who need facilities built for them need to be prepared to pay their fair share of the transportation budget. That is true because the deficit in our transportation funding is so huge that there simply is no free lunch. And it’s true because in our polarized, tax-averse political world, the ability to get anything paid for depends on everyone feeling that the system is fundamentally fair, most especially the people being taxed.

Washington’s primary source of road funding is the gas tax. The State Supreme Court has held that gas taxes cannot be used for transit facilities under the state constitution. So, transit is paid for by sales tax and recently by a motor vehicle excise tax, as well as federal funding. But gas taxes are a declining resource. If the number of vehicle miles driven stayed unchanged, the shift to more fuel efficient vehicles would automatically reduce gas tax revenues. The recession compounded that effect by causing people to drive fewer miles. As recently as 2010, the State’s Office of Financial Management forecast that gasoline use would increase at around 1.2% per year over time. Today it estimates that gasoline consumption will fall on average about 0.43% per year. We have not kept up with basic maintenance of our state or local transportation infrastructure. A commission appointed by former Governor Chris Gregoire estimated that the state has at least a $50 billion backlog of maintenance and basic infrastructure preservation tasks. That was before a federal judge ordered the State to accelerate repair of culverts that block 1,000 miles of salmon migration – at the cost of more than $1 billion.

The bottom line is that my plug-in hybrid puts exactly the same demands on our state and city roads as my old VW Beetle did. But it not only doesn’t make me pay for gasoline, it also exempts me from gasoline taxes.

My partner wants – correctly, in my view – the City to spend a lot of money to build bicycle lanes, to separate bicyclists from automobiles. We need to do that. Bicycling is great exercise for our increasingly sedentary society and we should encourage it. It is carbon neutral. Most importantly, bicycles and automobiles in the same space are a disaster on two fronts: the bicycles slow down the cars and thereby increase congestion on already congested streets, and while a fender bender between two cars makes for repair bills, the same accident between a car and a bicyclist kills or maims the bicyclist. We simply must separate the two.

But the cost of all of this will necessarily fall most heavily on the people driving cars. In a world with Tim Eyman, it may need a vote of the people. Even if a vote is not required, politicians who vote for new taxes are going to have to explain and defend that decision at the next election, and if people don’t feel the decision was warranted, politicians will be replaced. Taxes must be fair, and they must be perceived as being fair. If they are not, they will not last long in a democracy.

There has been an argument among bike and electric vehicle enthusiasts that they are “so good” for the environment, it is important to encourage them, and that they should somehow be exempt from taxes. It is as if taxes, being nasty, should fall on the folks who want to do “nasty” things, not on people who are “virtuous.”

Don’t get me wrong. I will happily take my tax credit if the federal government wants to make up for the fact that the plug-in part of my car added several thousand dollars to its cost. Subsidizing early technology is one of the key ways that government has brought many technologies to commercial viability. But the federal tax credit is the government’s effort to get the plug-in hybrid market past its initial start-up costs. I don’t expect that in addition to federal tax incentives, the fact that I bought a green car should keep me from paying my fair share of the cost of the roads I drive it on. I think all people who believe that it is important to make basic infrastructure investments in our transportation system should be prepared to step up to their share of that cost. That includes me, and the folks about to spend $500 on a new bike.