(THE CENTER SQUARE) – A group of Ohio economists disagrees over moves by the state and the country toward electric vehicles and whether government investment in electric vehicle infrastructure is cost-effective.
Nearly half of the 19 economists at Ohio colleges and universities surveyed by Scioto Analysis said the state’s current $200 annual fee for registering electric vehicles is progressive. In contrast, a little more than half believed spending tax dollars on EV infrastructure is likely to be more cost-effective than providing the same amount in tax credits.
Among those who agreed the registration fee is progressive, some said it was because higher-income people tend to buy electric vehicles.
“Essentially, this comes down to whether households increase their likelihood to drive an electric car increases more or less than proportionately with income,” Ashland University professor Paul Holmes said. “I think it increases more than proportionately with income, which would make the fee progressive, at least in the income range where people are at least somewhat likely to own electric cars."
One economist said the fee is trivial and questioned the idea of providing government money to encourage EV use and then taxing the use with a $200 registration fee.
"$200 has a trivial impact on the progressivity of our overall tax system, and it is irrational to subsidize EVs to encourage use and then tax it back. It should add a teeny amount of progressivity given that the average fleet age of electric cars is a lot newer than for gas cars and that the ratio of high-end electric cars is higher than for gas cars and the fact that the poorest Ohioans don't have a car or generally drive a used, gas-powered car,” Jonathan Andreas, a Bluffton University professor, said.
A bill currently in the Ohio House would require 25% of new vehicles purchased by the state of Ohio to be EVs in less than 3 years.
State Reps. Kent Smith, D-Euclid, and Casey Weinstein, D-Hudson, want all new vehicles for the state’s fleet of 12,405 to be entirely electric by Jan. 1, 2030.
Also, Sen. Michael Rulli, R-Salem, took steps that he said he hopes will help the state grow in both the electric vehicle and production market.
His bill would provide financial incentives to EV manufacturers who retool traditional auto production facilities for EV manufacturing. It would also offer grants to colleges and trade schools that train workers for those facilities.
If passed and signed into law, Senate Bill 307 would also create a task force to provide guidance on the market and invest in EV charging stations.
Rulli’s bill, which has been assigned to a committee, has the Ohio Chamber of Commerce’s support.
