CDOT exploring tax on electric vehicles, raising gas tax

September 11th, 2011 by investigates Categories: Reports, Updates No Responses
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by Todd Shepherd

Emails obtained by “Independence Investigates” show that the Colorado Department of Transportation (CDOT) is conducting significant research on raising department revenues through at least two new potential transit taxes.

One item being researched: raising the state gas tax starting in 2014.

The next item examines how to wring more revenue from electric and alternative fuel vehicles since those higher-mileage vehicles pay less taxes at the gas pump, or sometimes no taxes at all if the car runs only on electricity.

A July 28 email from CDOT’s Deputy Executive Director Herman Stockinger asks a CDOT staffer for various revenue estimations by raising the state gas tax (with some varying assumptions), starting in 2014.

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CDOT provided the following PDF that shows the projections to the research questions posed by Stockinger. According to CDOT’s assumptions, a one-cent increase in the state’s gas tax, beginning in fiscal year 2013 and running continuously for 10 straight years would produce just shy of $300 million.

CDOT public relations director Stacey Stegman says the research was not created at the direction of the Hickenlooper administration.

“CDOT is asked regularly about what an increase in the gas tax would generate,” Stegman said. “This question comes from our planning partners, local governments, the state Transportation Commission, etc. The last time we updated the ‘what does one cent generate’ information was for Governor Ritter’s Transportation Finance and Implementation Panel so most of the data we have been using was about four years old.  Internally at CDOT, we regularly put information together on the state’s transportation needs and recognize that there is a need for increased funding if we’re going to meet these needs so we try to maintain this data and keep it up to date.”

In a separate email, legislative liaison, Melissa Nelson-Osse, says CDOT is strongly considering running an alternative fuel vehicle tax in the 2012 General Assembly session. According to the email, the proposal was to be delivered to Governor Hickenlooper by CDOT Director Don Hunt on August 3, but CDOT again says they were not directed to undertake the research by the Hickenlooper administration.

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As for the details of the electric vehicle tax, the email indicates that the language and structure of any bill would likely lean heavily on similar proposed legislation from Oregon in 2011 that essentially uses odometer metering to assess the vehicle use tax. That legislation in Oregon, however, was killed late in last year’s session. Odometer metering taxation is also sometimes called “pay-per-mile” taxation.

Stegman says thus far, the real concern isn’t hybrid vehicles, which obviously do pay gas taxes, but the research is more focused on electric vehicles. “More and more electric vehicles are hitting the market, and so it was time for us to take a look at how we are funded and how we can ensure that all vehicles pay their fair share to drive the state’s highways given that they all still cause wear and tear,” Stegman said.

Electric vehicles have indeed been hitting the market at a faster pace, thanks in part to state and federal subsidies to the buyer. Colorado gained national attention in 2009 as a Boulder seller of the Tesla Roadster sports car advertised that the $109,000 electric vehicle could be purchased with approximately $42,000 in tax credits, essentially creating a 39 percent retail discount on a high-end luxury sports car.

In Oregon, opponents to the pay-per-mile tax argued the state should be encouraging the use of “non-polluting” vehicles, and that a pay-per-mile tax would create disincentives for alternative-fueled vehicles.

By law, CDOT must also create an “annual deficit report” to submit to the Colorado General Assembly.

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