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Electric vehicle owners won’t pay higher NC registration fees next year after all

An effort to raise annual registration fees paid by the owners of electric vehicles in North Carolina has faltered, but sponsors of the legislation vow they will try again.

Sens. Jim Davis and Tom McInnis, both Republicans, said they proposed raising the fee and enacting a new one on plug-in hybrid vehicles to make up for the gas taxes owners of these vehicles avoid paying. North Carolina drivers pay 36.2 cents a gallon in state taxes, generating about $2 billion for the N.C. Department of Transportation this year, or about 40 percent of its revenue.

Davis and McInnis initially proposed raising the electric vehicle fee in stages from $130 a year to $275 by 2022. The proposal was simplified to $230 a year starting in 2020 and eventually folded into the version of the budget approved by the Senate.

But there was no companion bill in the House. Budget writers there included a higher electric vehicle fee in their version of the budget, but it was stripped out before the House approved it. When the two sides got together to work out a compromise, the Senate’s electric vehicle fee provision was removed.

The change apparently happened late in the process, said Davis, who wasn’t aware that it had been taken out until a reporter asked about it.

“The fee provision for electric and plug-in hybrids was removed as part of the negotiation with the House,” Davis wrote in an email last week. “The Senate wanted it in, considering electric and plug-in hybrids are not paying their fair share of the gas tax which supports the maintenance and construction of our highway system.”

Critics say that’s not true. They cite a report released by the N.C. Clean Energy Technology Center, a state agency based at N.C. State University, that estimates that owners of electric vehicles can expect to avoid paying a total of $1.15 million in gas taxes this year, or slightly less than $100 per vehicle. If anything, critics say, the current $130 fee is too high.

Owners of electric vehicles also said the proposal was unfair because, unlike the gas tax, they would pay the same annual fee no matter how much they drive.

The provision in the Senate budget would have set the first annual fee aimed at owners of plug-in hybrid vehicles — those that have gas engines but that can also run on a battery charged by an external source. The fee would have been $115 per year, starting Jan. 1, 2020, the same date as the higher electric vehicle fee.

Davis said he and McInnis will try again to get the fees enacted. They lead the Senate’s transportation and transportation appropriations committees.

A growing number of states are looking to special fees to help offset a decline in revenue from fuel taxes, as improved efficiency means drivers go farther on a gallon of gas. As of last fall, 21 states had registration fees on electric and hybrid vehicles, according to the National Conference of State Legislatures, and several other states have enacted them this year, including Ohio, Illinois and Arkansas.

A Democratic senator from Chicago originally proposed an electric vehicle registration fee of a $1,000 a year, but the Illinois legislature settled on $248 a year, which is $100 more than owners of gas-burning cars pay, according to the Chicago Tribune.

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Richard Stradling covers transportation for The News & Observer. Planes, trains and automobiles, plus ferries, bicycles, scooters and just plain walking. Also, #census2020. He’s been a reporter or editor for 32 years, including the last 20 at The N&O. 919-829-4739, rstradling@newsobserver.com.
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