Tennessee Governor Proposes Toll Lanes, Electric Vehicle Registration Fee Increase
By Jon Styf (The Center Square)
Tennessee Governor Bill Lee and the Department of Transportation are looking to raise the annual vehicle registration fees for electric vehicles up to three times to $300 along with adding potential toll commuter lanes.
The proposals come as Lee and the department claim the state needs $26 billion in funding toward road congestion, with $14 billion for the state’s four major metro areas, and $12 billion for rural interstates.
The proposals came during a presentation from Lee and the department.
Lee said in the announcement the state would not raise the gas tax or issue new road debt to fund the road improvements and that it would look for a public-private partnership to build the toll lanes and then have users pay tolls to use the additional lanes.
“As Tennessee continues to experience unprecedented growth, it’s critical we invest in roads and bridges to fully harness our state’s success,” Governor Bill Lee said. “I asked Commissioner (Butch) Eley to look at best practices around the country to see what’s working and what isn’t. The Build With Us plan will provide quality infrastructure in both rural and urban communities and blunt congestion without raising the gas tax or going into debt.”
The department claimed that gasoline engine cars pay an average of $300 annually in gas taxes and registration fees while electric vehicle owners pay the $100 annual registration fee. The math presented did not include the cost of taxes on electricity paid by EV owners and it comes as Tennessee currently has a one-year registration fee moratorium on personal gas-powered vehicles and autocycles.
The cost of that moratorium was estimated to be $121.6 million.
Tennessee saw an influx in pandemic-related funds over the past two years, with $3.7 billion in federal dollars coming to Tennessee in the Tennessee Resiliency Plan for projects, many of which would have otherwise required state spending. Those funds were not allowed to be allocated for road improvement projects, only to fill budget holes created by the COVID-19 pandemic and fund projects for departments impacted by the pandemic.
The state also collected $4.6 billion more than budgeted in taxes and fees last fiscal year. Those statistics include gas taxes and registration fees.
The state has also increased its private business incentives, giving nearly $1 billion to Ford for its electric truck manufacturing Blue Oval City project, promising $500 million to the Tennessee Titans for a new covered stadium, giving multiple incentives to Ultium Cells – a $60 million incentive and another unannounced incentive – for a yet-to-be-completed battery cell project in Spring Hill.
Last week, the department also promised $40 million in incentives to LG Chem for a new Clarksville facility to the produce electric vehicle battery component cathode.
Academic research shows that the largest impact of the spending of public dollars is to bring political and financial benefit to the politicians who approve those incentives.
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