[Oeva-list] Fwd: Electric car tax -- HB2328

Jon Balgley jon at photodad.com
Wed Apr 13 15:36:41 PDT 2011


---------- Forwarded message ----------
From: Rep Read <read.rep at state.or.us>
Date: Thu, Apr 14, 2011 at 2:05 AM
Subject: RE: Electric car tax -- HB2328
To: Jon Balgley <jon at photodad.com>

Dear Mr. Balgley,

Thank you for writing and sharing your concerns with the electric car tax. I
appreciate your perspective on the issue.

I appreciate your concerns about legislation that would create a
disincentive for the emergence of a market for electric vehicles in Oregon.
 I strongly support the emergence of this new technology and am working on
other legislation to encourage the availability of electric vehicle charging
stations to lessen the worry about charging up away from home or the office.

As a legislator, I have the challenging task of balancing competing
interests.  On one hand I support the emergence of electric vehicles in
Oregon.  On the other hand, as co-chair of the House Committee on
Transportation and Economic Development, I have the responsibility to ensure
the viability of the highway trust fund so that the state can care for the
road system that new electric vehicles will drive upon.

I am sure you agree that operators of electric vehicles should not drive our
road system for free in perpetuity.  EV owners should pay something for
their use of the road system.  The only questions are what EV owners should
pay and when should they pay it.

A tax on use need not be regarded as a penalty, as long as it is fair.  A
road usage tax would be based on use and thus mirrors the gas tax for
standard vehicles.  Paying based on use is longstanding policy for road
funding in Oregon.

HB 2328 is a bill sponsored by Oregon’s Road User Fee Task Force.  The task
force has a nine-year tenure in developing new ways to fund our state’s road
system.  The task force has researched many viable ways to collect a tax on
miles driven, one of which involves wireless transfer of an odometer reading
from a car’s existing odometer.  This is not outlandish technology and the
bill is based on that method of reporting, although ODOT will be able to
develop other reporting methods from which motorists may choose to suit
their individual needs.

As currently written, the bill also has a delayed start date for the new tax
on electric vehicles – January 1, 2014.  This will give the EV market time
to take hold before the new tax would be applied.  Also, the bill provides
that electric vehicles purchased before the 2014 model years would not pay
the tax.  They would drive free.  That’s an incentive to purchase early.

Further, the amount of tax paid under HB 2328 would be small as it is
currently written.  The tax rate was set at a level identical to what a
hybrid electric vehicle currently pays in gas tax, $6 for every 1,000 miles
driven.  That’s only $6 per month for high volume driving.  This does not
seem like much of a discouragement to purchase of these vehicles.

I think Oregon can both incent the emergence of a new type of vehicle
technology while at the same time protecting the way the state funds its
road system.  It is a balancing act and it must be undertaken with care.

House Bill 2328 will almost certainly be amended before going forward.  You
can be assured I will carefully consider the proposed changes to this bill
with a view of supporting but not hindering customer acceptance of the
emerging electric vehicle fleet.  I will at the same time, however, make
sure that electric vehicle operators pay a responsible share of necessary
funding to ensure the health of the road system.


From: Jon Balgley [jon at photodad.com]
Sent: Tuesday, April 12, 2011 12:28 AM
To: Rep Read; Sen Hass; Sen Bonamici
Subject: Electric car tax -- HB2328

Hello --

My name is Jon Balgley and I live in Rep. Read's and Sen. Hass's districts,
respectively.  I have recently purchased an electric car -- it's an older
car converted to all-battery power.  At some appropriate time, I would be
happy to show the car to you and/or talk to you about electric cars in

I strongly urge you to take appropriate action against HB2328 in its current
form.  There are a number of reasons why this bill would be a bad law:

1.  First and foremost, it sends the wrong message, at this point in time.
 Taxation can be used to encourage or discourage actions by citizens.  As
I'm sure you're aware, increasing taxes will tend to discourage the taxed
behavior.  I believe that as a society, we want to reduce the use of fossil
fuels.  So as part of that, we want to encourage the use of electric
vehicles -- especially here in Oregon where most of our electricity is
generated from hydropower.  Adding taxes and potentially burdensome
procedures will discourage the purchase and use of electric vehicles.

2. Although its purpose is to "augment the fuel tax", I believe it will
produce a net-negative revenue impact, and a net-positive impact on tax-free
gasoline usage.  That's because it is written as an *option* for (up to
5000) non-electric vehicles.  So the owner of any gasoline-powered vehicle
can choose to pay $0.0143/mile instead of the $0.30/gallon gas tax (ignoring
additional local taxes).  Why would someone choose to do this?  When their
gasoline tax cost per mile exceeds $0.0143 per mile.  If you do the math,
the break-even point is around 21 miles per gallon.  That is, any vehicle
which gets LESS than 21 mpg, would pay LESS tax if they sign up for the new
"electric car tax".  Many SUVs and large pickups get less than 21 mpg.  So
we would be encouraging the worst offenders.  You can bet that people who
drive the most inefficient vehicles will be the first to sign up!  And would
*encourage* the use of those vehicles!  Balance that against the "less than
1000" (according to the Oregonian) electric vehicles currently on the road,
and which have limited range (will pay limited mileage-based tax) compared
to gasoline-powered vehicles.

3.  As proposed, this bill effectively taxes electric vehicles at much
higher rates than gasoline-powered vehicles.  As shown in the previous
point, the proposed tax is "break-even" for a vehicle that gets 21 miles per
gallon of gasoline.  The Nissan Leaf and Chevrolet Volt are rated by the EPA
at 99 and 93 "MPG equivalent". So these vehicles would pay more than 4 times
as much tax as a "typical" 21 mpg gasoline car.

4. There are a number of less-important reasons why this bill would make a
bad law:
 A. It specifies relatively draconian punishments for relatively small
 B. It does not account for the cost of implementation on the state's side.
 A complex new collection mechanism may cost more than the increase in
revenues itself!
 C. It does not account for the complexities on the consumer side.  It seems
like it might introduce a complex and/or burdensome new system.
 D. It does not account for the disproportionate damage to roads caused by
heavier vehicles.  Road damage is exponentially related to weight (to the
4th power!), but gas usage (and gas-tax revenue) is linearly related.
 E. It does not account for other factors that cause disproportionate damage
to roads, such as the use of studded tires.

Finally, I would like to say that it is beneficial to begin to raise these
questions.  It's clear that the sponsor of HB2328 believes that electric
vehicles will become popular enough to make a difference to Oregon's current
revenue structure.  I look forward to that day, and when it comes, I will be
happy to pay my fair share.  But for the reasons above, HB2328 would make a
bad law, and I again urge you to vote or otherwise move against it.

Jon Balgley
5470 SW Dover Loop
Portland, OR 97225
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