I drive an all-electric vehicle, charged from my roof-top solar panels. Beginning this year, I will pay the state of Utah either an extra $90 per-year vehicle fee (rising to $120 in future years), or I can choose to pay 1.5 cents for every mile I drive, up to the maximum annual fee.
Unlike some electric vehicle owners who oppose this charge, I don’t mind paying it. Fossil fuel-powered vehicle owners pay gasoline taxes that contribute to maintaining the roads they use, and so should I. As Supreme Court Justice Oliver Wendell Holmes said generations ago: “Taxes are what we pay for a civilized society.”
What does bother me is the selective nature of this impact fee. Driving automobiles generates other significant costs. Most significantly, driving contributes to roughly half of the severe air pollution that plagues much of Utah’s population.
The fee is not a general “tax” that the Legislature can use for any public purpose. It’s a user fee tied to the impact of driving on roads. The fee must be used to address that impact.
Likewise, the choice to pay per mile rather than a flat rate is tied to my actual impact on the road system. The less I drive, the less impact I have, and the less I should pay. The pay-per-mile option also provides an incentive to drive fewer miles.
An economist would say that the fee internalizes the external costs I impose on society by driving my car on public roads. In lay terms, it forces me to pay my fair share of the costs I impose on others.
But auto-related air pollution also imposes serious adverse health costs on others, particularly on children, the elderly and persons suffering from existing illnesses. Those costs include human pain and suffering, but also direct economic costs for health care.
Every pollution-caused emergency room visit, hospital admission, and other form of medical care imposes costs on individuals and on our health care system. Research at the University of Utah shows that air pollution also causes lost wages and productivity, increases absenteeism at work and school, lost tourism revenues, and other costs to employees and businesses.
Shouldn’t we be required to internalize the costs of driving polluting vehicles? Shouldn’t vehicle impact fees provide an incentive to drive less-polluting vehicles? And shouldn’t we all have an incentive to drive fewer miles and reduce road congestion (by carpooling, taking multi-purpose trips and substituting vehicles trips with walking, bicycling or riding transit)?
A simple solution would be to replace the current user fee with a fee that captures the pollution-related as well as the road-related costs of driving.
A replacement impact fee would apply to all motor vehicles, both electric and fossil fuel-powered. A baseline fee tied to miles driven per year would more fairly allocate the costs that all drivers impose on the road system. Existing fuel taxes or registration fees could be reduced or eliminated to offset the new fees.
Like the current option for electric vehicles, a fee-per-mile approach would incentivize everyone — not only electric vehicle owners — to drive fewer miles. The simplest method would be to require all vehicle owners to report odometer readings every year as part of their regular registration renewal, and to pay accordingly. (Although most Utahns would report fairly, any cheating could be detected through the mandatory odometer reading when the vehicle is sold.)
Moreover, a new impact fee should capture the air pollution-related costs of driving. If electric vehicle drivers should pay their fair share of the costs they impose on roads, drivers of more polluting vehicles should pay their fair share of health care and other costs they impose on others.
Under this system, those who drive polluting vehicles should pay a higher fee per mile than those who drive electric vehicles. Just as the proceeds of the current electric vehicle fee are dedicated to road maintenance, this portion of the fee could be dedicated to air pollution abatement and to pollution-related health costs.
Then, we would all have an incentive to drive less, and to drive less-polluting vehicles. Everyone would pay their fair share, and the overall costs would go down.
Robert Adler
Robert W. Adler teaches environmental law at the University of Utah S.J. Quinney College of Law.