NC Senate presents budget proposal highlights
A bill that would increase registration fees for electric cars and levy a new one on plug-in hybrid vehicles failed to get out of committee in the state Senate, but the proposal lives on in the Senate’s version of the budget.
The proposed budget approved by the Senate on Friday would increase the annual fee paid by owners of electric vehicles by $100, to $230 starting next year. Owners of plug-in hybrid vehicles would face a new registration fee of $115 a year. Both fees would be adjusted for population growth and inflation annually starting in 2021.
Davis and McInnis, both Republicans, argue that the fees would make up for gas tax revenue the state loses because the owners of electric cars and trucks don’t buy gas. North Carolina’s gas tax, of 36.2 cents a gallon, will generate about $2 billion for the N.C. Department of Transportation this year, accounting for about 40 percent of its revenue.
A similar proposal was included in an early version of the House budget but was stripped out before the plan was approved by the House. Budget negotiators from the House and Senate will have to decide whether the proposal ends up in the final version of the budget the General Assembly sends to the governor.
Owners of electric vehicles have paid a special annual registration fee since 2013, and it was raised to $130 two years later. But this would be the first time hybrid vehicle owners would face such a fee. It would apply only to plug-in hybrids and not to those that generate and use their own electricity from the gas-powered motor or the braking system.
That’s an improvement, said Bryan Goodman of the Alliance for Automobile Manufacturers, but new and higher fees are still concerning.
“Industry has dedicated a lot of resources to innovating and creating these electric cars, and generally speaking we don’t like bills that lead to disincentives for electric vehicles,” said Goodman, a spokesman for the industry group based in Washington. “These cars are environmentally friendly, and we think the legislation should reflect that.”
Other critics of the higher fees for electrics say the current fee of $130 a year is more than enough to offset the lost gas tax revenue. They cite a report released by the N.C. Clean Energy Technology Center, a state agency based at N.C. State University, that found that the 11,645 electric vehicles registered in the state at the beginning of this year can be expected to avoid paying $1.15 million in gas taxes, or slightly less than $100 per vehicle.
David Kelly of the Environmental Defense Fund says he understands the motives of Davis and McInnis, but says the Clean Energy Technology Center’s analysis shows that electric vehicle owners already pay their fair share. Anything more would be discriminatory, Kelly said.
“Given the policy challenge that lawmakers say they’re trying to solve, it really seems like the fees need to be related to the impact these folks are having on the highways,” he said. “Anything more than that, in our view, is just a penalty.”
Owners of electric vehicles also say a flat registration fee is unfair because it doesn’t take into account how much or how little they use the roads. An owner that drives 4,000 miles a year would pay the same as someone who drives 20,000 miles.
Davis, the sponsor whose district includes the state’s far western counties, introduced an amendment on Wednesday that he said would have the fees apply only to cars and trucks sold on or after Jan. 1, 2020. But the amendment, which was approved, also says the registration fees would apply to vehicles “due for renewal on or after that date,” which sounds like the standard annual fee that every owner would pay. Calls by The News & Observer to Davis’ office were not returned Thursday or Friday.