COLUMBIA — Lawmakers are considering increasing fees for electric vehicles in South Carolina to help offset the growing gap in taxes those sorts of cars don’t pay at the gas pump.
While fully electric vehicles make up less than 1 percent of all vehicles registered in South Carolina, their numbers are expected to skyrocket over the next few decades. By 2050, it’s predicted that 60 percent of all new vehicles sold will be electric, accounting for 40 percent of all vehicles on the road, according to the state Department of Transportation.
The $120 biennial fee paid by electric vehicle drivers in South Carolina already doesn’t make up for the cents on the gallon they’d otherwise pay at the gasoline pump, SCDOT Secretary Christy Hall told a Senate subcommittee June 8.
That’s a problem because South Carolina still relies overwhelmingly on gasoline taxes to fund roadwork on the nation’s fourth-largest highway system, making up 70 percent of all state funding for roads, according to DOT.
“We know it’s really going to be a problem in 10 to 15 years,” said Sen. Tom Davis, R-Beaufort, the subcommittee’s chairman. “We need to get out in front and figure out what are the best ideas out there.”
Other possibilities include creating a fee at electric charging stations, he said.
The state’s registration fee for electric vehicles would have to be between $200 and $250 annually to equal what gasoline-fueled drivers pay toward road maintenance, based on average miles driven per gallon, Hall said.
And that’s as of the 26.75 cents-per-gallon drivers will pay starting July 1 in state taxes, representing the fifth of a six-year phase-in under the 2017 state law that will increase taxes by 12 cents on the gallon total.
Alabama, Georgia and West Virginia already charge electric vehicle drivers $200 a year. Other Southeastern states charging more than South Carolina include Virginia, Tennessee, North Carolina and Mississippi, according to Hall’s presentation.
South Carolina’s 2017 law marked the first time in 30 years legislators increased the gas tax. They also increased regular registration fees by $16, created the $120 fee for electric vehicles and $60 biennial fee for hybrid vehicles, and raised the sales tax cap from $300 to $500 for every vehicle sold.
Legislators recognized at the time that increasing fuel efficiency, combined with an increase in non-gasoline-powered vehicles and inflation, would require diversifying DOT’s funding sources. But the changes still don’t cover maintenance and construction costs, and the gap’s only expected to widen.
Even gas-powered vehicles are getting more miles out of each gallon sold, creating more wear and tear on the roadways but sending DOT less money to pay for upkeep, Hall said.
It would take an additional $240 million a year to do the regular repairs, bridgework and non-interstate widening projects needed to bring the state’s roadways to good condition, Hall said, noting that’s in line with what she told legislators in 2017.
The Senate panel is exploring ways to make up the gaps. Some shortfalls could be covered by Congress, Davis said, noting the infrastructure spending debate in Washington, D.C.
The subcommittee expects to meet over the off-session and make recommendations when the Legislature’s next regular session begins in January.
“She’s looking to us for help,” said Senate Transportation Chairman Larry Grooms, R-Bonneau, who’s also on the subcommittee. “Our state’s growing faster than we can keep up with. That was not addressed in the roads bill we passed. The other part, which is why we’re here today, is what happens with electric vehicles.”
Follow Seanna Adcox on Twitter at @seannaadcox_pc.