Are electric vehicle owners paying enough for Illinois roads?

An additional $100 fee charged to electric vehicle owners in Illinois generated more than $8.8 million for the state in the last year.

That's up more than $3.3 million from a year ago, and is earmarked for road construction projects in the state, according to Illinois Secretary of State figures.

But - because EV drivers don't pay the more lucrative motor fuel tax - some industry experts and government leaders worry owners may not be covering their fair share of road maintenance costs.

"This is a very messy policy landscape at the moment," said Adam Hoffer, director of excise tax policy at the Washington, D.C.-based Tax Foundation. "Nationwide, this has become a very challenging issue in many states."

The additional fee was intended to cover lost motor fuel tax revenues partially created by the transition to electric vehicles by some motorists. Of the 32 states that charge additional registration fees for electric vehicles, Illinois' rate is lower than 20 of them, according to a September Tax Foundation report.

Electric vehicles have gained in popularity in recent years because they are less reliant on fossil fuels than traditional vehicles and are considered better for the environment. The state reported 55,333 registered electric vehicles in November 2022; a year later the number had climbed 60.2% to 88,632.

More than two-thirds of all electric vehicles in Illinois belong to suburban residents, according to secretary of state registration data. Suburban Cook County alone is home to more than a quarter of all registered electric vehicles in the state.

All were subject to the $100 surcharge, which goes into the state's road fund.

But the additional fee is lower than what most Illinois gasoline-powered vehicle owners pay in motor fuel taxes each year, according to research by the AAA Foundation for Traffic Safety.

Nationally, the owner of a gasoline-powered vehicle buys 562 gallons of gasoline on average annually, according to the AAA report. The state's current motor fuel tax rate is 45.4 cents per gallon, which means the average owner of a gasoline-powered vehicle pays about $255 in motor fuel taxes annually.

"In a perfect world, electric cars owners would pay a proportional amount for the maintenance of the roads that other drivers do," said Ed Beauvais, highway commissioner in Maine Township. "It should be balanced."

Beauvais also worries electric vehicles, which are almost double the weight of similarly sized gasoline-powered vehicles, might degrade roads at a quicker pace as they become more prevalent.

But Kevin Burke, executive vice president of the Illinois Asphalt Pavement Association, said electric-powered passenger vehicles have about the same effect on roads as traditional cars and small trucks.

"The real question is going to be what is the impact when you start having electric heavy trucks," he said. "Overall, we need to have a conversation about better ways to fund highway construction."

And while the extra revenue from the additional registration fee is nice, it falls millions of dollars short of the $12 million the state allocated and already has committed to rebates for new purchases of electric vehicles. The rebate program, run through the Illinois Environmental Protection Agency, offers a $4,000 rebate to Illinois electric vehicle buyers. IEPA officials reported in mid-November there were already more applications for rebates than money to give.

"Illinois is one of seven states that gives you an incentive to buy an electric vehicle and then slaps you with a penalty every year," Hoffer said.

Currently, electric vehicles make up less than 1% of all vehicles registered in Illinois, according to the secretary of state's office. That means the vast majority of drivers are still paying motor fuel taxes the old-fashioned way.

Motor fuel taxes are collected by the state and distributed to counties, municipalities and township road districts based on the number of miles each agency maintains.

Before electric vehicles, motor fuel taxes were a nearly perfect user fee for road maintenance. To drive, vehicles need fuel, so governments tax the fuel. Someone who drives more puts more wear and tear on the road. But since they need more fuel to drive farther, they pay more in taxes for the upkeep of the road.

As gasoline-powered vehicles became more fuel efficient, governments just increased the tax rate to maintain revenue levels.

But electric vehicles pose a difficult taxing problem. States such as Iowa, Montana, Oklahoma and Utah are taxing electric vehicle charging station usage, according to the Tax Foundation report. Georgia and Kentucky are doing something similar. But those taxes only apply to public charging stations.

Molly Hart, a AAA spokeswoman based in Chicago, said a recent survey of electric vehicle owners revealed 75% do their charging at home.

"Since charging remains an evolving consumer habit, legislators should explore all options to ensure adequate funding for road repairs," Hart said. "If a method allows for more accurate funding collection, policymakers should be encouraged to experiment and find the best solution that meets their community's and industry's needs."

Currently, there's no momentum in the Illinois legislature to tax charging stations.