Utah officials are busy designing a system to tax cars that now escape the gasoline tax — such as electric and hybrid vehicles — according to how many miles they drive. But they say they need some tweaks in state law to actually launch it.
Such a new system could save drivers of those “clean-fuel” cars money, compared to new flat fees they will begin paying Jan. 1.
Nathan Lee, director of technology and innovation for the Utah Department of Transportation, delivered that message Wednesday to the state’s Transportation and Tax Review Task Force.
Legislators and highway officials have long worried that revenue from the gas tax — which funds the bulk of state highway maintenance — has been declining as gasoline-powered cars get better mileage, and increasing numbers of hybrid and electric cars pay little or no such tax.
So as part of a transportation reform bill passed this year, the Legislature decided to start charging owners of electrics and hybrids a flat fee when they renew their registration after Jan. 1. The money will be used to pay for highway maintenance. Owners complained the new fee may increase air pollution by decreasing financial advantages for such clean-fuel cars.
Beginning Jan. 1, electric cars will begin paying a $60 fee, plug-in hybrids will pay $26 and gas hybrids will pay $10. The fees increase a bit each year until 2021, when electric cars will pay $120, plug-in hybrids will pay $52 and gas hybrids will pay $20.
That is still cheaper than what other vehicles pay in gas tax. Lee said a typical gas-powered sedan now pays $184 per year; a pickup truck pays $303; and a semi-truck big rig pays $757 — based on the 29.4 percent state gas tax for 15,542 miles driven on average here.
Lee said Utah has about 44,500 electric and hybrid vehicles affected by the new fees, compared to about 2.3 million vehicles that pay gasoline or diesel taxes.
But the new law also instructed UDOT to come up with a way to charge the clean-fuel vehicles according to miles driven — up to the amount charged by the new flat fees. That allows drivers to save some money by driving less. Joining that program would be voluntary for vehicle owners, and was ordered to be available by Jan. 1, 2020.
Lee said UDOT has come up with plans that may use odometer readings for those fees or data transmitted by cars to a third-party vendor to be chosen by the state. He said UDOT will put out a formal request for proposals later this week.
He said UDOT should be able to meet the deadline for the new program, but the Legislature needs to make some changes in current law to allow it — including outlining how fees are set.
Lee said laws also need to explain how data gathered may be used by the state and its vendor, and must detail enforcement mechanisms — including putting a registration hold on non-payers.