Despite concerns, $290 electric vehicle fee proposal advances in Pennsylvania

(The Center Square) — Although a bill that creates an electric vehicle fee in Pennsylvania cleared a House committee on Monday, it’s unlikely to pass in its current form.

Senate Bill 656, sponsored by Sen. Greg Rothman, R-New Bloomfield, would replace the alternative fuel tax with a $290 EV fee paid at the time of vehicle registration. Owners would also have the option of enrolling in a monthly payment plan.

The fee would fill the place of the gas tax for electric vehicles, which some experts have called the “best path forward” as gas tax revenues continue to fall in Pennsylvania, leaving a funding gap for highway maintenance.

Democrats on the House Transportation Committee oppose the fee, but advanced the bill to the chamber floor anyway for debate to tease out what they see as its unfair approach.

The current system for EV owners is to file monthly statements on electric use and remit the tax to the Department of Revenue. Rothman, in a legislative memo, called the process cumbersome and noted that most EV owners don’t file the statements or are unaware that they are required to.

“This legislation will simplify the process and ensure electric vehicle owners are paying their fair share towards the Commonwealth’s transportation infrastructure, just as individuals who drive gas-powered vehicles contribute towards fuel taxes,” Rothman wrote.

The fee would fund highway maintenance and construction.

In June, the Senate passed the bill 41-9.

The committee approved the bill on a 22-3 vote, but not without reservations.

“I oppose the current version of this bill,” Rep. Ed Neilson, D-Philadelphia. “I adamantly oppose this piece of legislation. I’m going to vote yes today only so we can move the bill forward to the full House while the amendment is still being negotiated between leadership of both the House and the Senate.”

Neilson said that countless meetings with various groups have followed a May committee hearing on EV fees.

“There’s a whole lot of agreement that EV owners should pay some kind of EV fee to upkeep our roads and bridges. However, this is not the right bill,” he said. “If this bill passes and gets put into law, (the fee) will be the highest in the country. We want to make sure that this legislation is done fairly — $290 is way too high.”

The fee has already been negotiated down. In Rothman’s original proposal, private owners would have paid a $380 annual fee and commercial owners would have paid a $450 annual fee, though the $290 figure has been discussed since May.

Neilson also criticized the current bill as not including rules concerning plug-in hybrid vehicles, pegging the fee to inflation, and other “technical issues.”

The revised figure is close to what Pennsylvanians pay on average through the gas tax. A report from the Independent Fiscal Office found that the average driver paid $285 in gas taxes in 2021.

House Republicans called the bill a fair change.

“There’s an issue of fairness here — I think everyone that drives on our roads needs to pay a fair share on that,” Rep. Kerry Benninghoff, R-Bellefonte, said.