South Carolina depends on driver and vehicle-related fees to fund transportation infrastructure. And, like most states, our predominant source of revenue comes from fuel taxes.
Our current transportation funding policies are based on the historical mindset of fuel consumption, and the more you drive, the more you pay. But how does this hold up long term with ongoing improvements in fuel economy and the anticipated growth of the electric vehicle (EV) market?
There is a lot of buzz around EVs, and the technology is advancing quicker than our public policies can keep up. Many states, including South Carolina, impose higher registration fees for EVs to offset the loss of fuel tax revenues.
However, South Carolina’s registration fee of $120 biennially ($60/year) is much lower than our sister states, and it does not reflect what the average driver spends per year in fuel taxes.
In addition, a growing number of states are implementing a kWh fee on public charging stations. Essentially, they are treating electricity like fuel. This is seen as an effective and equitable way to capture revenues, especially from out-of-state EV drivers.
While EVs represent a small segment of vehicles in South Carolina, ownership is growing rapidly. Therefore, legislators must consider public policy changes to include EVs in the transportation funding equation. Until then, EVs will continue paying a fraction of what their fuel-powered counterparts pay for infrastructure improvements.
