Let’s set some ground rules

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December 6, 2018

Most governments offer tax breaks or incentives for people to drive green. The federal tax credit for an electric car can reach $7,500. In California, hybrids and electrics allow you to drive solo in high-occupancy vehicle lanes. In Ohio, the state fairgrounds offer special parking for green cars.

Mississippi, however, is going the other direction.

In October, people who drive gas-electric hybrids started paying a $75 tax when they registered their cars or renewed their tags. All-electric car owners must pay $150. State officials estimate that 15,000 people will pay the new tax (14,000 hybrid drivers and 1,000 all-electric drivers).

While already drawing condemnation from environmentalists and complaints from anti-tax-increase proponents, the new tax comes from a place of practicality, not ideology, and it’s a sign of some future problems that we’re likely to face as new technologies become prevalent on the road.

Mississippi, as with all U.S. states, funds its highway maintenance, repairs, and new construction with proceeds from a 13-cents-per-gallon gasoline tax. So, people who don’t buy much or any gasoline aren’t paying to maintain the roads. On one hand, regulators push to improve fuel economy to reduce U.S. dependence on imported oil and to improve air quality. On the other hand, no one likes potholes.

Some lawmakers in Mississippi are vowing to repeal the new tax, but the issue won’t go away, and it’s not limited to hybrids and electrics. As traditional gasoline-powered cars and trucks get more fuel efficient, drivers will pay less in gasoline taxes while driving more, creating more challenges for road maintenance departments.

This funding crisis has been building slowly for more than a decade. I read a report prepared for Texas lawmakers who were studying the problem in 2011. The response from most states has been to transfer resources from general funds or to cut spending.

Technology will create other challenges. The push for autonomous cars and trucks could dramatically reduce accidents and fatalities, so lawmakers are doing everything they can to shepherd that technology into the market. However, self-driving cars that follow the rules don’t get speeding tickets.

While municipalities talk about the need to enforce speed limits in the name of public safety, no one denies that enforcement leads to revenue. Without speed traps, many communities would not be able to afford to have as many police officers on the road – something that may sound great to someone scared of a speed trap but terrifying to someone in need of immediate assistance.

As the technologies become common, the rules are going to have to change. Public funds generated from gasoline taxes, traffic tickets, and parking fees (cars that used to stay next to meters or in expensive municipal lots could in the future autonomously drive away to free spaces) will have to be replaced.

New technology promises a safer, greener future for everyone on the road. Now, we just have to figure out how to pay for it.