Kansas considering gas tax raise and electric vehicle fees

The DOT and legislature is striving to find new funding sources to maintain its R&B system

Funding News November 30, 2018
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Kansas considering gas tax raise and electric vehicle fees

State officials and lawmakers in Kansas are batting around the idea of a 5 cent per gallon state gas tax increase, raising the present 24 cents per gallon up to 29. Kansas has begun crafting a new long-term transportation plan to guide future highway projects. A state task force finalized recommendations this week Thursday for a program that will eventually replace T-WORKS, the 10-year, $8 billion transportation plan that kicked off in 2010.

 

Sen. Tom Hawk (D-Manhattan) voiced support for the gas tax boost, stating that if Kansas is going to have a highway plan, it needs a steady stream of funding. “A gas tax means that people who are using the roads pay for them, and I think user fees are the fairest form of taxation we have,” Hawk said.

 

Kansas now charges 24.03 cents per gallon on gasoline (excluding federal gas taxes). Every 5 cents of tax produces approximately $90 million a year. Kansas has one of the lower gas tax rates in the country. The highest-taxed state is Pennsylvania, at 58.7 cents per gallon, while Alaska’s 14.65 cents per gallon is the lowest, according to rankings from the Tax Foundation.

 

Another topic broached is the possibility of charging the owners of electric vehicles an annual fee as a possible source of revenue. Supporters of such a measure say a fee would ensure electric vehicle owners pay their fair share to help maintain the state’s highways since they don’t pay taxes on gasoline purchases. But opponents fear a fee would eliminate an incentive for drivers to purchase the more environmentally friendly vehicles. A fee of $200 per vehicle could generate $40 million each year by 2030, as the number of electric vehicles is expected to grow steadily over time—notably because the major auto manufacturers are investing heavily in developing EV technology.

 

More than 15 states have already imposed extra taxes or fees for electrified vehicles, according to the Sierra Club. That group has opposed special fees for electric vehicles, arguing that they sometimes mean electric vehicle owners end up paying more than owners of gas-fueled vehicles.

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