States throughout the country seem to always be looking to secure transportation funds for needed road, bridge and transit work.
Funds are often secured via higher taxes, higher vehicle fees, tolls or borrowing. Occasionally, states will tap existing revenue from other funds. At least a portion of those funds will be diverted to transportation.
There are some instances when states will take money from transportation for other uses. There are far fewer examples of states simply eliminating transportation revenue sources without a replacement for lost revenue.
State lawmakers in one state this fall are looking to eliminate an existing revenue source. The change would trim millions annually in transportation funding.
House Bill 389
A bipartisan pursuit at the Ohio Statehouse would get rid of an additional registration fee for hybrid personal vehicles.
The state collects an additional $200 yearly fee on electric vehicles and a $100 fee on hybrid vehicles. The fees have been in place since 2019.
State lawmakers enacted the fees as a way to offset assumed loss of fuel tax revenue from certain alternative-fuel vehicles.
Six years later, HB389 would eliminate the $100 fee for traditional hybrid vehicles.
According to the National Conference of State Legislatures, Ohio is one of 34 states to collect a fee on such vehicles.
Committee discusses change
The House Transportation Committee met last week to hold the first hearing on the bill.
Rep. David Thomas, R-Jefferson, told committee members his bill would provide a “taxpayer fairness step” in eliminating the additional registration fee.
“I don’t believe a blanket extra registration fee simply because there is a battery is warranted,” Thomas testified.
Rep. Joe Miller, D-Amherst, echoed the point about fairness.
“When it comes to traditional hybrid vehicles, we are double taxing our constituents,” Miller said. “Many hybrid vehicles have no external charging source, which means they run exclusively on gasoline.”
He reminded committee members the Legislature took action earlier this year to lower the fee on plug-in hybrid vehicles. The fee was lowered from $200 to $150.
The Ohio Legislative Service Commission estimates that eliminating the $200 fee on traditional hybrid vehicles would result in $30 million in lost transportation revenue in fiscal year 2027. Just over half that amount is allotted to the state highway fund. Local governments claim the rest.
Despite the hit to state and local funds, House Transportation Committee Chair Bernard Willis, R-Springfield, expressed his support for the legislation.
“These vehicles are some of the most efficient vehicles on the road. We should incentivize that in some way,” Willis said.
HB389 is not yet scheduled for further committee consideration. LL
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