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Tuesday, Nov 28, 2023

Some Drivers Get to Bypass the Gas Tax

When you are waiting in line at a Costco gas station for more than 30 minutes, to save 50 cents on gas, you might suddenly start to wonder where it all went wrong. What caused our gasoline prices to increase astronomically in such a short period of time? Yes, our first thoughts go to the Russian invasion of Ukraine, but let’s be real. California has had an underlying issue, and now that the price of gas has risen to more than $6 a gallon, people are finally starting to wonder what it may be. 

One of the answers might surprise you. It’s the more than one million electric vehicle drivers across the state – a number which recently Gov. Gavin Newsom announced with pride – that have played a crucial role in our gas prices becoming insanely unaffordable. 

Now that people’s economical Honda Civics and Toyota Camrys are costing more than $60 to fill up, we sit and wonder why we have a gas tax and think about how ludicrous it is to be paying such high prices. Well, surprise, we don’t all pay the gas tax. Our friends with electric vehicles, who in case you didn’t know, use the same roads as us, are exempt from paying the gas tax. Why? Well because they’re being “environmentally friendly,” of course. Well, I’m sure a lot of Californians would be environmentally friendly if they could all afford an electric vehicle and the costs needed to maintain one. 

Who is it that drives electric vehicles? According to a 2019 Fuel Institute report, “the top demographic of 2019 EV (electric vehicle) owners are middle-aged white Americans earning more than $100,000 annually with a college degree or higher.” 

It’s the middle- and upper-class folks who can afford the car itself and the infrastructure it takes to operate it. That includes installing charging stations at home or being able to sit and pay at a charging station in the middle of an Erewhon shopping center during the day. Those have become the new book clubs. If you ever drive by one of them, you’ll see people parked and watching Netflix as their car charges. 

The rest of us, who primarily commute for work or use our vehicles for work, can’t afford to run out of charge with the low range offered on fully electric vehicles. Not to mention the car itself, the infrastructure behind it, or even working in an area that offers EV charging stations readily available. It would be fair to say, those individuals who can’t afford flashy, luxury cars are now being punished with exorbitant gas prices.

Drivers of electric vehicles need to pay their fair share just like the rest of us. While they drive on the same roads and use the same public services as drivers of gas vehicles, they don’t pay the California gas tax, which funds our roads and services. So now, while Gov. Newsom proudly speaks of his 1 million EV drivers, the rest of us are paying about $6 a gallon – and it’s $6 as I’m writing this. Who’s to say it won’t increase to $7 by the time this column is published. 

Nearly $7 billion in gas tax revenue supports local streets and roads, highway rehabilitation projects, state parks, and other public programs. Electric vehicle drivers benefit from these things just as much as the drivers of gas vehicles who pay for them in taxes – and yet they don’t contribute to the funding for them. 

When state legislators tried to tackle our traffic problem, they created incentives. If you purchased an electric vehicle, you would receive state tax credit, federal tax credit, and everybody’s favorite – HOV lane access. They designed the incentives so that we can clear cars off roads. They were supposed to encourage carpooling. Now, the same demographic who probably had a commuter and luxury vehicle can purchase one car that is both a commuter and a luxury vehicle. They now can skip traffic driving in the HOV lane and charge up for free from the parking structure in their high-rise office building. 

What have the incentives solved? Nothing. The incentives need to go, and policy makers need to rework the gas tax to ensure all Californians are responsible to pay. We all drive the same roads. We all need well-maintained roads and bridges to ensure safe travel – and that is what the gas tax is meant to fund. If we stopped taxing the middle and working classes so much and spread the responsibility of maintaining public roads to all drivers, people could start affording vehicles that are better for the environment. If it helps, we can rename it. Call it the “driver tax.” But let’s be honest, that will probably be challenged once people start purchasing autonomous driving vehicles. We’ll change it again to “car tax” once we get there.

You know when you read an article and it shows published date and then an updated date if new information has been presented? Well before we could even get the original version of this column published, the gas rebate was announced. And to our surprise (that was sarcastic), even EV drivers are going to receive the proposed $400 rebate. I’m not sure what their $400 rebate is supposed to help alleviate, but for the rest of us it’s for the gas prices that have now reached about $6.50. As you read above, when I started writing this, we were at $6. Now we’re halfway to $7. 

Back to the rebate though. Here’s a breakdown – $400 to Californians for each vehicle registered in their name. Payments capped at $800 for anyone with more than one vehicle registered under their name. EV drivers are eligible. Oh, and if you didn’t know, the proposal calls for “$9 billion in tax refunds to be sent directly to Californians to help relieve residents from skyrocketing gas prices.” 

What EV driver is suffering from the “skyrocketing gas prices?” Yeah, I didn’t think there was one.

It’s simple. It is time for electric vehicle drivers to pay their fair share. It is time they support their local communities as well as the environment – just as much as drivers of gas vehicles do.

Stuart Waldman is president of the Valley Industry and Commerce Association, a business advocacy organization based in Van Nuys that represents employers in the San Fernando Valley at the local, state, and federal levels of government.

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