State lawmakers and Gov. Greg Abbott did the smart thing this week when they created a $400 initial registration fee and a $200 annual renewal fee on electric vehicles.
No, not because it adds cost to owning an electric car, but because it provides at least some replacement funding for the motor fuel taxes the state depends on for its highway fund.
Texas has long lacked adequate funding for the construction and maintenance of its state highways and roads. The motor fuel tax that drivers pay at the pump is a major source of funding for that work.
But gas prices are among the most politically sensitive issues there are, and the state’s gas tax hasn’t changed from 20 cents per gallon since 1990. The federal gas tax has been 18.4 cents since 1993.
The cost of concrete and labor have hardly been so stable. As construction costs have ballooned, the state highway fund hasn’t been able to keep up. In 2014, the state collected $3.3 billion in motor fuel taxes. In 2022, it collected less than $3.8 billion.
There is no chance that Texas can maintain and build the roads we need on the funds the motor fuel tax pulls in. And there is no chance that lawmakers want to mess with the amount people pay at the pump.
Or, as the Texas Department of Transportation put it in a funding brief last year: “For years, traditional funding from state and federal gas tax revenues sufficiently met the needs of the state highway system. Over time, however, these revenues failed to meet the transportation needs of the state’s growing population and the mobility needs of the traveling public.”
The transition to electric cars marks an opportunity to decouple politics from road construction funding. Drivers need to shoulder this cost, and drivers of electric vehicles certainly should not get a free ride on state roads. The Legislature plainly understood that, and passed the electric vehicle fees with bipartisan support.
Over time, that fee may prove more adjustable than the gas tax. If so, it could restore some balance to the way highways are funded.
Texas is only going to keep growing. And the share of electric cars on the road is going to grow along with it. Making sure the state has the funds it needs to grow and expand opportunity is smart planning, and the Legislature and governor got this right.
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