Utility Bill: Gas Tax Break For Electric Car Owners Costs CA $32 Million Each Year In Lost Revenue

Electric Vehicle Charging Station
Electric Vehicle Charging Station

As most Californians reach deeper into their pockets to pay higher gas taxes for road repairs, electric vehicle owners have been getting a free pass. Many will continue to benefit under a little-known provision of the law, costing the state tens of millions of dollars annually and drawing objections from taxpayer advocates who say all who use the roads should pay their fair share.

With some provisions of Senate Bill 1 taking effect later this year, the tax breaks have reignited a debate from 2017, when the Legislature and then-Gov. Jerry Brown raised gas taxes by 17.6 cents per gallon and implemented an annual $100 fee for some zero-emission vehicles, effective July 1, 2020, to help pay for repairs to state roads and bridges.

The contentious law — which led to a failed repeal effort and the recall of a state senator who voted for the legislation — exempts all 100% electric and hydrogen-fueled cars with model years before 2020, amounting to more than $32 million in lost transportation revenues each year.

Lawmakers who approved the measure, including several who have benefited from the exemption, say they see a greater good in encouraging more people to drive cars that don’t pollute at a time when climate change is a deep concern.


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