Proposed tax on hybrid, electric cars would make Minnesota’s the highest in the nation

Zero emissions? Pay up, kid.

Zero emissions? Pay up, kid. Associated Press

Minnesota State Senator Jeff Howe, a Republican from Rockville, wants hybrid and electric vehicle drivers to quit freeloading.

On Wednesday, the Senate held a hearing on Howe’s proposed bill, which would place a $125 surcharge on all hybrid vehicles and increase an existing surcharge on fully electric vehicles from $75 to $250.

As he told the Pioneer Press, it’s time those low-emission motorists paid “their fair share” into Minnesota’s roads and bridges fund. If passed, it would become the steepest tax on hybrid and electric cars in the nation.

You may be asking, how exactly are people who drive hybrid or electric cars freeloading? And shouldn’t we be making it easier to afford a vehicle that’s better for the environment and therefore benefits everyone? And isn’t this the same party that was virulently opposed to the additional 20-cent-per-gallon tax Governor Tim Walz wanted to place on gas in order to fund infrastructure?

To answer that last one -- yes, it is the very same party. But here’s Howe’s argument: People who drive hybrids and electric cars buy less gas, and by extension, pay less in gas taxes. But they still drive on the same roads gas cars do, inflicting the same amount of wear and tear.

Gas taxes pay for the biggest chunk of the state’s roads and bridges fund (28 percent), and Minnesota has quite a few crumbly roads and bridges that could use some help. So, Howe’s trying to make those drivers chip in for the gas taxes they’re not paying.

It’s not an unprecedented move. A handful of states place an extra surcharge on hybrid and electric cars. North Dakota’s Senate just passed some new fees last month, largely for the same reasons Howe is citing -- $110 for electric vehicles, and $50 for hybrids. The bill is awaiting approval from the House.

And what Howe is saying is true: Hybrid and electric drivers aren’t contributing as much to the state in gas taxes. But electric vehicles make up only 1 percent of vehicles on the road, both in Minnesota and the United States overall -- which means they’re not exactly a huge untapped resource for infrastructure. (That’s according to Tim Sexton, the Minnesota Department of Transportation’s chief sustainability officer.)

Critics of that North Dakota bill thought pretty much the same thing. They pointed out that there are only 141 electric vehicles and just under 4,000 hybrids registered in their state, and called the new fees a “money grab” that would “penalize” people who are “being environmentally responsible.”

On top of that, Sexton told the Pioneer Press, people who own hybrids generally wind up paying more to the state on average than people who own gas-only vehicles anyway, thanks to pricier registration and title fees.

Howe says he knows electric cars and hybrids aren’t the most robust revenue resource now, but he’s expecting gas tax revenue to decline in 2020 as more people switch to alternative vehicles. He would be just as supportive, he says, of a bill that would add a tax to the wattage used to power those cars just like we have with gas.

“I’m not trying to penalize them or anything,” he says of hybrid and electric vehicle drivers. But he also thinks raising the gas tax 20 cents a gallon “isn’t the answer,” and will end up putting a burden on people who use gas-powered cars to get around.

It will be a while before Minnesota’s bill gets a vote in the Senate, let alone ventures into the Democrat-controlled House, but we’ll know in the coming weeks if Howe’s colleagues see things his way.