Ohio House Passes Transportation Budget is Damaging Compressed Natural Gas and Electric Vehicles

On March 7, the Ohio House of Representatives passed the latest version of the state transportation budget by a vote of 71-27. The budget contains provisions that will be extremely damaging to the alternative fuel industry in Ohio.

Included in the legislation is a fee increase on electric vehicles (EVs),plug in hybrid electric vehicles (PHEVs and compressed natural gas (CNG). The house voted to require owners of EVs to pay a $200 fee per year and PHEVs to pay a $100 fee per year. These fees would be an additional penalty since they would be required up-front rather than the pay-as-you-go method for gasoline taxes. A $200 fee would position Ohio with West Virginia and Georgia as the most extreme anti-plug-in EV states in the US. Both states have seen a dramatic reduction in adoption rates for plug-in vehicles.

“The proposed new $200 tax on EVs is unfair and seems to be based on exaggerated numbers designed to punish EV owners with taxes to discourage adoption in Ohio.” said Sam Spofforth, Executive Director for Clean Fuels Ohio. “It also would significantly damage a market that will benefit Ohio’s economy, consumers and our health if it is allowed develop.”

At press time, CFO and other allies were working with Ohio state senators to reduce the fee levels in the Senate version of the transportation budget bill.

Additionally, the House voted to require CNG users to pay a tax at the same rate that is charged for gasoline. This would amount to over a $0.35/gallon tax for the industry immediately. While the gas and diesel markets have had decades to adjust to price fluctuations and tax changes, the CNG market would not have that same adjustment period.

“State legislators are yanking the rug out from an industry that represents less than half a percent of all vehicles on the road,” said Gary Yeates, Mechanical Technician for InsightFuel. “Applying the full excise tax to CNG vehicles takes away a significant financial incentive for fleets to use a cleaner, domestic motor fuel that has higher up-front costs based on vehicle costs. The tax change would have little impact on the road budget but would have a dramatic effect on air quality in Ohio as fleet operators transition back to diesel because it's cheaper in the short term. This is a giant step backwards for Ohio’s transportation sector.”

The budget has been referred to the Senate Transportation committee, which is taking public comment and hearing testimony on the proposed changes. The transportation budget must be signed by the Governor by April 1st.

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