Hybrids, electric vehicles pose funding challenge for next Kansas highway program

photo by: Associated Press

This is a July 25, 2018 photograph of a Nissan LEAF automobile plugged into a electric vehicle charging station at a Whole Foods Market parking lot in Jackson, Miss. (AP Photo/Rogelio V. Solis)

TOPEKA — When Kansas lawmakers sit down to write a new multiyear transportation plan this coming session, one of the biggest challenges they’ll face is how to pay for it.

Traditionally, funding for highway construction and maintenance has come from the state’s motor fuel tax — 25 cents a gallon for regular gasoline and gas mixed with 10 percent ethyl alcohol; 27 cents a gallon for diesel.

The state also diverts about 16 percent of its sales tax revenue toward the highway fund, although those transfers have been interrupted in recent years as the state struggled with budget deficits.

But with more fuel-efficient cars on the road, traditional motor fuel taxes have not been generating the kind of revenue they once did. And now, with the mass production of all-electric plug-in vehicles, or EVs, on the horizon, Kansas, like many other states, will be looking to find other ways to fund highway projects.

“Fuel-efficient vehicles are great for the environment and everything, but you still have four wheels on the road,” Sen. Carolyn McGinn, R-Sedgwick, said in a phone interview Tuesday.

McGinn, who chairs the Senate Ways and Means Committee, also chairs a special legislative task force that will meet at the Statehouse Wednesday and Thursday to finalize its recommendations for the next multiyear transportation plan to replace the T-Works program, which officially expires this year.

Although hybrid and all-electric vehicles currently make up only a small percentage of vehicles on the road, their numbers have been growing steadily, and some market analysts have estimated that all-electric vehicles could make up 65 percent of new light-duty vehicle sales in the United States by 2050.

As a result, the National Conference of State Legislatures reports that states are looking at a number of options for funding highway programs in the future, such as levying special fees on electric vehicles, or levying taxes based on the number of miles driven — what some have called an odometer tax.

“There’s been mentioning of those things, like miles-driven or an odometer tax,” said Rep. Troy Waymaster, R-Bunker Hill, a member of the task force who also chairs the House Appropriations Committee. “However, I think that would be somewhat difficult to try to manage. That’s been mentioned.”

But Waymaster said Kansas will have to find some way to tax EVs in the future, “because they do have wear and tear on the highway system but they don’t contribute to the motor fuels tax.”

McGinn, however, indicated she may be more open to the idea of an odometer tax.

“We would have to do a little more study on that, but today we have so much technology, we have more capability of trying to figure out how to track that,” she said.

In addition to special taxes on EVs and some kind of miles-driven tax system, McGinn and Waymaster said a number of other options may be on the table, including another motor fuel tax increase and expanding the use of toll systems beyond just the Kansas Turnpike.

One of the thorniest issues, however, may be an insistence by some that lawmakers put protections in place to prevent future legislatures from sweeping sales tax revenue out of the State Highway Fund, as they have been prone to do in recent years.

“That’s kind of the elephant in the room,” Waymaster said.

Waymaster said there have been some discussions about a possible constitutional amendment that would earmark a certain percentage of the state’s sales tax receipts to fund transportation projects. But he said he is not necessarily in favor of that.

“Because if we should find ourselves in a recession or in problematic budget times again, where is that money going to come from to balance the budget?” he said. “We’ve tried an array of things in the last few years, and that transfer was needed to balance the budget. If there’s a constitutional amendment protecting that, then it will just cause problems if we find ourselves in budget issues like we had a few years ago.”

The task force will meet from 8:30 a.m. until 4:30 p.m. Wednesday to develop preliminary recommendations. It will meet again at 8:30 a.m. Thursday to put together the final report that will be delivered to the 2019 Legislature when it convenes in January.


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