Moving to a VMT Tax

[Max Rockatansky]

Divorcing the Road Geek stuff for the moment and looking at my present situation an EV still isn't very viable.  I have a 38 mile rural one-way drive to my home office everyday and there are times I'm recalled in an emergency overnight.  Unless I want to spend some serious money on a higher end current EV there isn't much the segment offers me right now in terms of a reliable range that I need.  I can't plug in at work and I would need start charging right away the second I got home.   It's just way easier to buy some entry level ICE car and run into the ground over 5-7 years. . 

Granted, that's just my own situation and perspective.  Suffice to say the way I live, work and commute does not fall within the conventional norms.

I've been watching the industry carefully, because I am interested in a hybrid vehicle that permits recharging and allows the driver to disconnect the combustion engine until the battery bank is nearly depleted.  I'm also interested in customizing such a vehicle to have a 240VAC inverter.  I was shocked (pun intended) when the early prototype of the Ford Lightning F-150 actually has a 240VAC inverter, but I seriously doubt this feature will make it into production.  Anyhow, in a wooded area where lengthy power outages happen several time a year (we were just out during the storm 9 days ago), a vehicle that could also be a power source during an emergency would justify the additional cost.  And I would prefer diesel (good luck on that one).

Unfortunately VW probably sealed the fate for diesel powered cars after their emissions scandal, I too would be very interested in one.  Interestingly I am kind of curious if any grid improvements locally will be coming anticipation of EVs drawing from them en mass.  Thus far SoCal Edison and PG&E don't really seem to be up to the challenge on fixing their outdated grids by the time 2035 comes around without some serious subsidies.  The rolling blackouts last year probably will become a regular thing for some time during Santa Ana Wind season.

[Scott5114]

My plan for buying an EV is to install solar panels on the roof at about the same time, so as to mitigate the increase in electrical usage.

Fortunately the OK power grid is relatively sturdy and there's enough supply to meet the demand year-round. The only thing we're susceptible to is infrastructure damage due to inclement weather, and I'm fortunate in that my neighborhood has buried power lines, so that I only have to worry about losing power if one of the main transmission lines goes down (in which case fixing it will be a much bigger priority than if the outage only affected my house or neighborhood).

[kernals12]

Might be best to just say, for personal cars, that the taxes go to whichever state's license plate the vehicle carries. If I register it in Oklahoma, Oklahoma gets all the mileage associated with it. Is that fair to states like Kansas and Missouri, whose drivers spend a lot of time on the other state's roads? No, but it's the least bad option, especially since most people's daily driver has a negligible impact on road maintenance costs, only road capacity, and most individual people do the vast majority of driving in the state their car is plated in.

If cross-border traffic is really a concern, the states involved could form a compact to pool their money and distribute it as they feel more appropriate. New England would be a good candidate for this, since I imagine there are lots of people who live in RI and commute to MA or CT, and so on.

For local roads, I'm not sure why it wouldn't just be handled like the federal road fund is now–state collects so much money, allocates a certain amount to the DOT, then turns over the rest to city and county DOTs according to a formula of some kind, probably based on the number of cars registered there.

It may be worth doing a GPS-type system for commercial vehicles, since many of them are already subject to more stringent logging requirements anyway, and the state has a compelling interest in looking at that data to spot safety issues (e.g. that adequate breaks are being taken). Since that would cover the vast amount of vehicles with a high enough GVW to damage the roads, that would help to finesse the inequities of the personal-car system described above.

I've suggested the exact same type of system for most vehicles - the state where the car is registered collects all state VMT fees. I imagine that in most cases, the revenue gained from out-of-state trips would probably be about a wash with revenue lost from not taxing non-residents. It's simple and avoids privacy concerns from tracking movements.

For vehicles that currently have logging requirements, I'd just keep those as-is. There's no real reason to change.

A few years ago Connecticut threatened to start tolling the tiny portion of 684 that runs through Greenwich due to a dispute with New York over maintenance costs. So yeah, out of state drivers are a hassle.

[kernals12]

Some of you seem to think that EV technology will not improve at all in the future, that the spectacular progress of the last decade is just going to come to a sudden halt.

[Dirt Roads]

My plan for buying an EV is to install solar panels on the roof at about the same time, so as to mitigate the increase in electrical usage.

I've been researching this as well.  The solar industry has changed over to either on-grid solar or off-grid solar, neither of which am I impressed with.  However, both of these still employ their own battery banks.  The concept of EV charging via solar panels has also influenced this industry.  All of which leads me to the punch line:  one of the new leaders in the "solar battery" industry is Tesla.  Which comes with a 240VAC inverter.  If they made this with L6-20R or L14-2R receptacles, I'd go ahead and purchase one.  Right now, you still need a building permit to wire up one of these things (at least where I'm at).

[Max Rockatansky]

Some of you seem to think that EV technology will not improve at all in the future, that the spectacular progress of the last decade is just going to come to a sudden halt.

I don't think I've ever implied it won't progress.  But I don't make my buying choices based off of "what might come"  down the line.  To that end when I new daily driver in four years I'll see where things stand at the time.  At the moment I'm doubtful there will be an entry level car at price point to fit the needs I described above come 2024-2025.  It's one thing to blow money on a Tesla like vehicle versus something more economically practical than a Subaru Impreza or Ford Fiesta. 

If anything I'm more concerned that the automotive world seems to be moving away from entry level vehicles than I am worried about the progression of EVs.

[GaryV]

Also, I would imagine most drivers would start charging right away when they got home. That's what I'd do–turn off car, get out, charge, go in the house, forget about the car until the next morning, and wake up to a full charge.

Electric companies are talking about variable rates, because everyone uses the most energy in the late afternoon and evening.  Hopefully your charger would come with a timer so it could start in the wee hours.

[1995hoo]

For those interested in EVs, the latest issue of Car and Driver is well worth a read. They explain a fair number of practical considerations you don't hear explained very often, they test a bunch and select their "EV of the Year," and they do a 1,000-mile loop race from Ann Arbor to Cincinnati, across to Morgantown, and back to Ann Arbor. Very interesting read, and I found the race story interesting because one of the things that gives me pause about EVs is how they would likely limit my routing choices due to charger availability. I believe the magazine addressed GaryV's point and said that pretty much all of them are designed so you can program your home charger to use cheaper electricity at night.

I hope not to be in the car market for a good while, but I'd certainly assess EVs as an option when the time comes. Whether one would be viable is another issue. Some people say "use the EV locally, use an ICE vehicle for travel." Fair enough on the surface, but any EV I'd seriously consider would run at least $40,000 to $50,000, and I think most people could understand why I feel that if I'm going to drop that amount of money, I'd want that car to be my primary car for all purposes. (Setting aside my preference for a manual shift, as the odds are that the list of options there will be exceedingly small when the time comes.)

[Max Rockatansky]

See, I couldn't see dropping 40-50k on a car I commute in.  That high price point for something so disposable is a huge turn off for me as a prospective buyer.  Like you said, a 40-50k automobile really ought to be capable of being a jack of al trades in my mind.  I didn't even spend 40k on my Challenger when I bought it outright in late 2015 and that was a "dream car"  type of thing.

Interesting aside, how collectible are EVs going to be down the line?  Having to replace entire electric motors after a certain amount of time probably is make the collector market footprint really small.  Probably nobody even now likely considers hanging onto their EV to take the car show in 20-30 years.

[1995hoo]

Back when the Tesla Model S first appeared and cost six figures, I remember commenting that the problem with a $100,000 car you only use for commuting is that if you can afford that, you probably don't need to commute.

(Edited to add: Just to be clear, I definitely recognize how much that particular car has evolved and how much its range has improved.)

[hbelkins]

Those are my thoughts. Does anyone else have any?

Yeah. Screw that noise. If you insist on levying a special tax on electric vehicles, tack that on as an excise tax when you buy one, as an annual fee at registration, or devise some sort of special device that meters the power you use when you charge the vehicle and assesses the fee that way. This tracking nonsense is for the birds. But then again, it's to be expected that the government is going to find a way to tap into any whiff of tax revenue it thinks it might be otherwise missing out on. Can't let people come up with ingenious or creative or inventive ways to actually keep more of their own money.

Or levy a tax at the charging stations that would make up for what isn't paid via home charging. I haven't inspected those charging banks at Sheetz closely enough to figure out how you pay for the juice there.

And we don't track people across state lines with gas-powered vehicles, why should we with electric ones? On my most recent trip to Pennsylvania, I bought gas in Ohio, then not again until I had left Pennsylvania, traveled through Maryland and West Virginia, and entered Virginia. Pennsylvania didn't get any gas tax revenue from me, so why should it get any electricity tax from me if I had driven a Tesla?

[quote author=Max Rockatansky link=topic=29756.msg2637725#msg2637725 date=162652 Of course this cross subsidy cuts both ways, when a state builds a new highway, property values in the surrounding area skyrocket and yet property owners don't pay for this benefit.

Oh, absolutely they do. Increased property values mean increased property taxes.

[vdeane]

If they're Tesla stations, the car communicates with the Supercharger and with Tesla, and the account associated with the car gets billed.  For other networks like Electrify America, some automakers have a similar feature; it's also possible to pay with a smartphone app or with a credit card.

There's also the issue of home charging.  Honestly, it's probably easiest to just slap a per-kwh tax on electricity than to try to single out charging, since most charging is done at home (one of the three big advantages of EVs that aren't related to emissions, the others being fast acceleration and less maintenance).  For someone who regularly buys cars with higher purchase prices, can charge at home, and takes predominantly local trips (and is willing to deal with the charge stops for longer ones), EVs are actually superior to ICE  cars today.  If cost or those other things are an issue, then they're not there yet.

[Scott5114]

Off-topic political posts removed.

[hbelkins]

If they're Tesla stations, the car communicates with the Supercharger and with Tesla, and the account associated with the car gets billed.  For other networks like Electrify America, some automakers have a similar feature; it's also possible to pay with a smartphone app or with a credit card.

There's also the issue of home charging.  Honestly, it's probably easiest to just slap a per-kwh tax on electricity than to try to single out charging, since most charging is done at home (one of the three big advantages of EVs that aren't related to emissions, the others being fast acceleration and less maintenance).  For someone who regularly buys cars with higher purchase prices, can charge at home, and takes predominantly local trips (and is willing to deal with the charge stops for longer ones), EVs are actually superior to ICE  cars today.  If cost or those other things are an issue, then they're not there yet.

But why should someone who doesn't own an EV subsidize those who do? EVs probably won't ever be much of a reality in the territory served by AEP/Kentucky Power, yet that firm charges astronomical rates for electricity. My Facebook feed is flooded every winter with comments about exorbitant power bills from Kentucky Power customers. They can't afford higher rates, especially for something that has no association with them. Kentucky will remain primarily a gasoline-powered-car state even if EVs take off in the northeastern megalopolis.

[kernals12]

Some of you seem to think that EV technology will not improve at all in the future, that the spectacular progress of the last decade is just going to come to a sudden halt.

I don't think I've ever implied it won't progress.  But I don't make my buying choices based off of "what might come"  down the line.  To that end when I new daily driver in four years I'll see where things stand at the time.  At the moment I'm doubtful there will be an entry level car at price point to fit the needs I described above come 2024-2025.  It's one thing to blow money on a Tesla like vehicle versus something more economically practical than a Subaru Impreza or Ford Fiesta. 

If anything I'm more concerned that the automotive world seems to be moving away from entry level vehicles than I am worried about the progression of EVs.

In 2023, Bloomberg forecasts lithium ion batteries will fall below $100/kwh, the level said to make electric cars cost the same as internal combustion ones.

[Scott5114]

Also, I would imagine most drivers would start charging right away when they got home. That's what I'd do–turn off car, get out, charge, go in the house, forget about the car until the next morning, and wake up to a full charge.

Electric companies are talking about variable rates, because everyone uses the most energy in the late afternoon and evening.  Hopefully your charger would come with a timer so it could start in the wee hours.

Variable rates are an option right now for OG&E customers that voluntarily sign up for their SmartHours plan. They market it as saving you money by allowing you to shift usage to off-peak hours. I looked into it when it first came out, but since my wife works 3rd shift there's no real way we can adjust the timing of our electricity usage in the way the electric company wants us to.

If anything I'm more concerned that the automotive world seems to be moving away from entry level vehicles than I am worried about the progression of EVs.

Unfortunately, this is a recurring trend in a whole lot of industries. Catering to higher-income people means higher profit margins, so that's all businesses want to deal with, and middle- and lower-income people get the dregs. You see this a lot in housing, for instance (build lots of fancy new four- and five-bedroom houses, leaving the ordinary people to scrap over the limited existing supply of older three-bedroom and smaller homes, driving up their prices beyond the point that anyone in the income bracket they were built for can actually afford them).

Oh, absolutely they do. Increased property values mean increased property taxes.

Eh, not always. In Oklahoma, the assessment that property taxes are calculated off of is only updated when the property is sold. I bought my house in 2017, and the assessment will always be pegged to its 2017 value. According to Zillow estimates, it's already appreciated by $50,000 since I bought it, but my property tax has remained the same. If I were to sell the house, the new owner will have to pay a higher property tax rate based on the new value.

This has caused some heartburn in OKC because there are some property owners that bought vacant lots near downtown OKC when property values were depressed during the oil bust in the 1980s and have held onto them ever since. The amount they are paying property tax is accordingly nowhere close to the rate the surrounding developed properties are paying, since downtown has been growing and increasingly becoming more developed since the MAPS projects of the 1990s.

But why should someone who doesn't own an EV subsidize those who do? EVs probably won't ever be much of a reality in the territory served by AEP/Kentucky Power, yet that firm charges astronomical rates for electricity. My Facebook feed is flooded every winter with comments about exorbitant power bills from Kentucky Power customers. They can't afford higher rates, especially for something that has no association with them. Kentucky will remain primarily a gasoline-powered-car state even if EVs take off in the northeastern megalopolis.

Why should someone who lives in Perry County subsidize roads in Paducah by paying gas taxes? Unfortunately, that's just how being part of a civilization works–you may be called upon to help pay for something that doesn't directly help you. If you don't care for it, you can always live somewhere like Haiti that doesn't have much of a government to fund.

[kalvado]

Why should someone who lives in Perry County subsidize roads in Paducah by paying gas taxes? Unfortunately, that's just how being part of a civilization works–you may be called upon to help pay for something that doesn't directly help you. If you don't care for it, you can always live somewhere like Haiti that doesn't have much of a government to fund.

Then, let's talk about gas tax being abolished with the introduction of road-related electricity taxes. BTW, how would we deal with taxing those subsidized rooftop panels?

[SectorZ]

If they're Tesla stations, the car communicates with the Supercharger and with Tesla, and the account associated with the car gets billed.  For other networks like Electrify America, some automakers have a similar feature; it's also possible to pay with a smartphone app or with a credit card.

There's also the issue of home charging.  Honestly, it's probably easiest to just slap a per-kwh tax on electricity than to try to single out charging, since most charging is done at home (one of the three big advantages of EVs that aren't related to emissions, the others being fast acceleration and less maintenance).  For someone who regularly buys cars with higher purchase prices, can charge at home, and takes predominantly local trips (and is willing to deal with the charge stops for longer ones), EVs are actually superior to ICE  cars today.  If cost or those other things are an issue, then they're not there yet.

But why should someone who doesn't own an EV subsidize those who do? EVs probably won't ever be much of a reality in the territory served by AEP/Kentucky Power, yet that firm charges astronomical rates for electricity. My Facebook feed is flooded every winter with comments about exorbitant power bills from Kentucky Power customers. They can't afford higher rates, especially for something that has no association with them. Kentucky will remain primarily a gasoline-powered-car state even if EVs take off in the northeastern megalopolis.

My National Grid power bill contains an "Electric Vehicle Charge" on it that started at some point I am unaware of. Granted it's 9 cents for my last month (with 627kWh usage), but yeah I'm subsidizing something else.

On the bill, here is the explanation for it: "Recovers the cost of the Electric Vehicle Program, including rebates for installation of EV charging infrastructure and for off peak charging."

[Scott5114]

Why should someone who lives in Perry County subsidize roads in Paducah by paying gas taxes? Unfortunately, that's just how being part of a civilization works–you may be called upon to help pay for something that doesn't directly help you. If you don't care for it, you can always live somewhere like Haiti that doesn't have much of a government to fund.

Then, let's talk about gas tax being abolished with the introduction of road-related electricity taxes. BTW, how would we deal with taxing those subsidized rooftop panels?

Taxing solar panels would undermine the purpose of why they are subsidized to begin with–we want to encourage people to use renewable energy and discourage them from using non-renewable energy. This would also be why completely abolishing the gas tax would be unlikely to happen, even if EVs were the bulk of the vehicles on the road.

[kalvado]

Why should someone who lives in Perry County subsidize roads in Paducah by paying gas taxes? Unfortunately, that's just how being part of a civilization works–you may be called upon to help pay for something that doesn't directly help you. If you don't care for it, you can always live somewhere like Haiti that doesn't have much of a government to fund.

Then, let's talk about gas tax being abolished with the introduction of road-related electricity taxes. BTW, how would we deal with taxing those subsidized rooftop panels?

Taxing solar panels would undermine the purpose of why they are subsidized to begin with–we want to encourage people to use renewable energy and discourage them from using non-renewable energy. This would also be why completely abolishing the gas tax would be unlikely to happen, even if EVs were the bulk of the vehicles on the road.

And you quickly get to the point, where the purpose of road tax - to ensure that everyone on the road contributes towards construction and maintenance - is lost. Moreover, you want to shift the tax burden towards a renter, who has no money to buy a fancy car or property to install solar, and driving gas grizzling clunker,  is taxed twice. Textbook grade example of regressive policy.
That's why VMT, with all it's complexity, is probably the way to go.

[hbelkins]

Oh, absolutely they do. Increased property values mean increased property taxes.

Eh, not always. In Oklahoma, the assessment that property taxes are calculated off of is only updated when the property is sold. I bought my house in 2017, and the assessment will always be pegged to its 2017 value. According to Zillow estimates, it's already appreciated by $50,000 since I bought it, but my property tax has remained the same. If I were to sell the house, the new owner will have to pay a higher property tax rate based on the new value.

This has caused some heartburn in OKC because there are some property owners that bought vacant lots near downtown OKC when property values were depressed during the oil bust in the 1980s and have held onto them ever since. The amount they are paying property tax is accordingly nowhere close to the rate the surrounding developed properties are paying, since downtown has been growing and increasingly becoming more developed since the MAPS projects of the 1990s.

Interesting. Kentucky law requires property be reassessed every four years. Each property valuation administrator (Kentucky's term for the elected tax assessor) goes about the process differently. Some counties are divided into geographical quadrants. For years, Estill County had a unique method: residential non-municipal property north of the Kentucky River, residential non-municipal property south of the Kentucky River, residential property in the cities of Irvine and Ravenna, and all commercial property countywide. Not sure if Estill still assesses property that way or not.

[vdeane]

Why should someone who lives in Perry County subsidize roads in Paducah by paying gas taxes? Unfortunately, that's just how being part of a civilization works–you may be called upon to help pay for something that doesn't directly help you. If you don't care for it, you can always live somewhere like Haiti that doesn't have much of a government to fund.

Then, let's talk about gas tax being abolished with the introduction of road-related electricity taxes. BTW, how would we deal with taxing those subsidized rooftop panels?

Taxing solar panels would undermine the purpose of why they are subsidized to begin with–we want to encourage people to use renewable energy and discourage them from using non-renewable energy. This would also be why completely abolishing the gas tax would be unlikely to happen, even if EVs were the bulk of the vehicles on the road.

And you quickly get to the point, where the purpose of road tax - to ensure that everyone on the road contributes towards construction and maintenance - is lost. Moreover, you want to shift the tax burden towards a renter, who has no money to buy a fancy car or property to install solar, and driving gas grizzling clunker,  is taxed twice. Textbook grade example of regressive policy.
That's why VMT, with all it's complexity, is probably the way to go.

Who says renters don't have solar?  Granted, it's not most places... but it certainly exists and is something a landlord could install if they want to attract tenants who want it.

[MikeTheActuary]

Dusting off this thread rather than starting a new one:

17 northeastern states are soliciting volunteers to collect driving data from, to help inform discussions on a possible shift from taxes on fuel to mileage-based taxes for highway funding purposes

News article: https://www.wtnh.com/news/connecticut/should-connecticut-tax-how-many-miles-you-drive/
Website for the group studying the issue: https://tetcoalitionmbuf.org/
Sign-up page for volunteers in Connecticut: https://tetcoalitionmbuf.org/connecticut-mbuf-study/

[1995hoo]

Both of Ms1995hoo's cars had the registrations due for renewal in May. Her 2015 Acura TLX is subject to the Virginia "Highway Use Fee," which is something recently enacted that tacks on an additional fee for vehicles that meet or exceed a certain level of fuel efficiency (you can read the specifics on the Virginia DMV's website if you're interested). She received a letter from the DMV saying she could sign up to track her mileage instead and that they would cap the fee for miles driven at the amount of the default highway use fee in order to ensure she wouldn't be penalizing herself; the information also said the system does not account for miles driven outside of Virginia and instead charges you for them the same as if they were driven in Virginia.

We decided not to participate in the mileage-tracking program. The highway use fee on her car was only about $12 anyway, so even if she might have possibly gotten a benefit via a reduced fee, the amount would have been so minimal that we could see no reason to do it.

[MikeTheActuary]

Dusting off this thread rather than starting a new one:

17 northeastern states are soliciting volunteers to collect driving data from, to help inform discussions on a possible shift from taxes on fuel to mileage-based taxes for highway funding purposes

News article: https://www.wtnh.com/news/connecticut/should-connecticut-tax-how-many-miles-you-drive/
Website for the group studying the issue: https://tetcoalitionmbuf.org/
Sign-up page for volunteers in Connecticut: https://tetcoalitionmbuf.org/connecticut-mbuf-study/

One additional news article / opinion piece on the subject: https://ctmirror.org/2023/06/25/ct-vehicle-miles-tax-mileage-based-user-fee-tolls-highways/ 
(The author has a definite bias, but it does provide some additional context).