Lawmaker AL: Widespread adoption of electric vehicles could lead to $700 million gas tax shortfall

MONTGOMERY, Ala. (WIAT) – Governor Kay Ivey and other state leaders are hailing the shift to electric vehicles in Alabama as a plus for the economy.

Lawmakers are wondering how to make up for lost gas tax revenue if, and some say when, electric vehicles become dominant on the roads.

Currently, Alabama collects about $1 billion a year in gasoline taxes that fund highway projects. However, a widespread shift to electric vehicles could reduce that total by about $700 million, according to House Ways and Means Budget Committee Chairman Danny Garrett.

“How are roads built in Alabama? And that’s a question as we consider this impending shift in consumer demand,” said Garrett (R, Trussville).

It’s a change according to Governor Ivey that could be significant for Alabama’s auto industry.

“We need to build on this new technology for the good of our economy tomorrow,” Ivey said at the EV Summit in Birmingham on Thursday.

The state charges a $200 annual fee for electric vehicles, but Garrett estimates it would only bring in about $200 million a year if the vehicles went electric. He says lawmakers have started talking about what to do if and when a revenue shortfall occurs.

“The change is not imminent, so it’s not going to be like now. I think the discussions have started and I think they will continue in the next session,” Garrett said.

This change could come sooner rather than later. Alabama Clean Fuels Coalition President Michael Staley said adoption of electric vehicles is happening rapidly.

“We saw a 62% increase in the number of electric vehicles registered for drivers in the state last year. This year, just in the first nine months of the year, we saw another doubling of those here,” Staley said.

Staley says electric vehicles shouldn’t be blamed entirely for a drop in revenue.

“What we have is increased efficiency in all forms of transportation, including gasoline-powered vehicles, and as a result, you have less gasoline tax revenue,” Staley said.

Another House Budget Committee Chairman, Steve Clouse, says he doesn’t think it’s something Alabama needs to address right now.

“Not at the moment, I don’t know. Who knows what may happen in 10 to 15 years,” Clouse (R, Ozark) said.

Staley says that even though EV drivers don’t pay gas tax, the state still benefits a lot from out-of-state drivers who stop to pay and spend money during their ride. stay.


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