As electric cars get more popular, South Florida cities say they’ll be the ones paying the price.
Westlake Mayor JohnPaul O’Connor has urged the Palm Beach County Legislative Delegation to push for a new state bill to find an alternative to pay for transportation funding as electric cars evade the gas tax, and the idea has the attention of Tallahassee politicians.
Floridians pay 38.6 cents on each gallon of gas, according to the Tax Foundation in Washington, DC., which is the 12th highest in the country. The gas tax is meant to function as a user fee, charging drivers to fund the construction and maintenance of the roads where they drive, according to the nonprofit.
“From a state perspective, this is the largest issue in transportation funding going into 2025,” Adam Hoffer, director of Excise Tax Policy for the Tax Foundation, told the South Florida Sun Sentinel on Friday.
“Every state has recognized the gas tax has done a pretty good job of funding road construction. It was a great user fee,” he said.
But the gas tax has performed poorly over time, he said, attributed to vehicles becoming more fuel efficient, “but more pronounced, EV (electric vehicles) don’t pay gas taxes at all.”
To combat this, 24 of the 50 states have a higher annual registration fees for electric cars; Florida is not one of them. The annual registration fees for electric cars include $50 in Hawaii and South Dakota, and $200 in Ohio, West Virginia and Wyoming, he said. Six states have a charging station fee; Georgia started theirs this month.
The tax on gas is big money for South Florida government.
Broward County is planning for an estimated $81.7 million in gas tax revenues for road and bridge maintenance and rehabilitation, transit, and traffic engineering projects, such as lights. That’s $800,000 less than last year, according to a spokesman.
The decrease is attributed to use of mass transit, people working from home, carpooling and electric cars. “There are a lot of variables,” said Broward County spokesman Gregory Meyer. The decline has been growing; two decades ago, in 2005, the county received $91.2 million in gas taxes, he said.
Palm Beach County expects to receive $54 million in local gas taxes in this fiscal year, according to a spokesman. Of that, $20 million will be used for roads and bridges and $34 million for Palm Tran service, the spokesman said. Losses could not be immediately calculated, a spokesman said.
Westlake’s O’Connor said “creative legislation” is needed to curb the losses.
“It’s a major, major problem,” he said. “It’s a major issue. More and more electric vehicles (are) sold every single day. I have one ordered. But yet we don’t contribute at all towards the maintenance and the gas taxes.”
It’s an issue that should be addressed nationally because of interstate travel, State Sen. Gayle Harrell, R-Stuart told the Palm Beach County Legislative Delegation. Tourists come to Florida in electric vehicles and are not participating in paying for the roads they are using, she said.
“We’re seeing this across the country, but Florida is probably other than California the most impacted by it,” she said.
Other state leaders said there was no reason to wait. State Rep. Kelly Skidmore, D-Boca Raton, suggested a charging station fee: “I don’t see why we can’t capture money that way.” She also suggested a registration fee for Florida residents.
“There’s opportunities here,” she said. “I do think Florida should take care of its own destiny and not wait for the federal government to fix this problem.”
O’Connor agreed, saying “why not a couple cents per kilowatt tax at the charging station at least to stop the bleeding for now. I truly think that Florida should do something at the state level. Something, whatever that might be, but we need to do something.”
But a bill for extra fees on electric cars and plug-in hybrids already failed in 2024. According to the bill analysis, the Florida Department of Transportation’s master plan determined that “negative impacts to motor-fuel based revenue streams in Florida could range between 5.6 percent and 20 percent by the year 2040, depending on the rate of growth of EV sales.”
“A perceived inequity may exist, in that electric vehicles do not require motor fuel to operate,” according to the bill that was filed in 2023. “The assertion is that EV owners may not be fairly contributing to the cost of constructing and maintaining public roads through payment of ‘traditional’ registration fees.”
But opponents to the bill which would have meant electric car owners would pay $200 registration fees had argued the proposal could result in electric vehicle owners being “double taxed,” the News Service of Florida reported.
Lisa J. Huriash can be reached at lhuriash@sunsentinel.com. Follow on X, formerly Twitter, @LisaHuriash