EDITORIAL: EVs skirt the gas tax

User taxes don’t function properly when some users are able to avoid the tax.

Fuel taxes and vehicle fees are two major sources of revenue for Nevada’s State Highway Fund. This makes sense. Officials use the State Highway Fund to build and maintain roads for vehicles.

Nevada Department of Transportation Director Tracy Larkin Thomason recently provided the Joint Interim Standing Committee on Growth and Infrastructure an overview of transportation funding. Ms. Larkin Thomason said her department needs between $1.6 billion to $2 billion annually over the next decade.

That’s a big number, and, unsurprisingly, NDOT is worried about hitting it. It’s the rare government agency that will ever say it’s well-funded. But, in this case, it’s understandable. Construction costs are through the roof, and new vehicles are generally more fuel efficient. Electric vehicles avoid the gasoline tax entirely.

“The fast adoption of electric and hybrid vehicles in the past several years is expected to increase and resume the dip on our fuel tax revenues,” Ms. Larkin Thomason told the committee.

NDOT says that the State Highway Fund currently receives about 0.9 cents per mile driven. NDOT projects it could receive only around 0.3 cents per mile driven by 2050. That’s a major decrease.

If the government takes its thumb off the scale, EVs may not continue to grow in popularity. But there remains a glaring problem. The gasoline tax is supposed to ensure that all road users pay for road construction. EVs are freeloading.

“Essentially, our choices to meet this are to find ways to increase the amount of revenue that’s going into the Highway Fund or that is dedicated to transportation, increase some of the other fees that are dedicated to transportation or increase General Fund revenue for some of these purposes,” Assemblyman Howard Watts said at the meeting.

There is another option — reduce expenses. The strained Highway Fund is a good reminder of why prevailing wage mandates are such a terrible idea. Before raising any taxes, politicians should ensure they are spending taxpayers’ money as efficiently as possible.

But there is a disconnect here that’s worth addressing. Committee members heard different ways to address this imbalance, including a tax on miles traveled.

“I did like the idea of it being based on annual mileage because our DMV in Nevada already requires you to submit your odometer reading when you submit your registration,” Assemblywoman Venise Karris said.

That’s a Pandora’s box — privacy, government tracking — that shouldn’t be opened for all drivers. But more than 40 states currently charge a specific registration fee for EVs. That would be a simple way — perhaps combined with mileage checks for EV or hybrid vehicles so those who drive more, pay more — to ensure EV owners contribute to road construction. If it were paired with a gasoline tax decrease, so much the better.

In recent years, government policies have favored EVs over gas-powered vehicles. Here’s another way to level the playing field.