As electric vehicles sales increase, gasoline tax revenue is expected to decline.

ATLANTA – With sales of electric vehicles on the rise, transportation agencies are going to have to find a way to raise tax revenue other than the gasoline tax, a transportation consultant told Georgia lawmakers this week.

Robert Poole, director of transportation policy for the Los Angeles-based Reason Foundation, urged members of the Georgia Freight & Logistics Commission to start thinking about replacing the gas tax by taxing motorists based on the number of miles they drive.

“Electric vehicle technology is coming much faster than most people realize,” Poole said. “Fuel tax revenues have begun what is going to be a long decline. We’re going to need to replace the fuel tax as a source of transportation funding.”

Poole and Benita Dodd, vice president of the Georgia Public Policy Foundation, teamed up on a recent report extolling the potential of the vehicle-miles-traveled (VMT) tax.

“We support looking at this as an alternative to a declining fuel tax base,” Dodd said.

Poole said another reason to consider the VMT besides the flood of electric vehicles hitting the auto market is the tightening of mileage standards for new cars by the federal government.

While the Trump administration temporarily blunted the push for higher mileage requirements by rolling back the CAFE (Corporate Average Fuel Economy) standards, the Biden administration is working on restoring them, Poole said.

“You can expect even tougher miles-per-gallon standards,” he said.

Poole said Oregon and Utah have launched pilot projects experimenting with the VMT, and the new $1.2 trillion infrastructure spending bill President Joe Biden signed this week authorizes a federal VMT pilot.

But Poole conceded the concept of a VMT has run into both practical and psychological obstacles.

On the practical side is the bureaucratic complexity of collecting a tax based on miles driven, compared to the simplicity of collecting gas taxes at the pump.

“This looks like a lot of record-keeping,” said state Sen. Frank Ginn, R-Danielsville, chairman of the Senate Transportation Committee and a member of the Freight & Logistics Commission.

Poole said the collection issue could be addressed by phasing in the VMT tax to apply only to interstate highways at first, which account for 28% of the road miles traveled in Georgia. Transponders installed along interstates could reduce the cost of collection to 5% of the revenue the tax brings in, he said.

But the idea of using transponders to track how far drivers are traveling has raised concerns among the public.

“One of the biggest worries is privacy, that you have Big Brother in your car tracking you,” Poole said.

“Everywhere you go, there’s a camera,” Ginn added.  “I just don’t want to go that route.”

Sen. Steve Gooch, R-Dahlonega, suggested a way to sell the VMT politically would be to levy the tax only on electric vehicles and continue taxing motorists who use gasoline when they fill up.

He said the General Assembly passed legislation in 2015 levying an annual fee of $200 on non-commercial EVs in order to avoid the unpopular idea of tracking motorists.

The Reason Foundation report recommended that Georgia take part in a multi-state VMT pilot project, then look to phase in the tax by imposing it first on limited-access highways before moving to state and local roadways.  

This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.