Added electric vehicle charge in Michigan comes with extra revenue, privacy concerns

SOUTHFIELD, Mich. (FOX 2) - Should electric vehicle owners be charged for the amount of miles they drive?

Only one country in the world has a mandatory system for charging drivers for the amount of distance they travel. And only two states have voluntary programs with a similar charging structure.

But with Michigan expected to miss out on hundreds of millions of dollars in lost gas taxes as the number of EV owners grows, the state's governor says several options are on the table. That includes an added fee for EV drivers.

"I think it is important for us to have a sustainable revenue source because our roads and bridges have been underfunded for decades," Gov. Gretchen Whitmer told FOX 2 in December. 

While the governor wouldn't commit to a vehicle miles traveled (VMT) system for all cars, she did endorse a fee structure for electric vehicles

A Democratic majority in the state House and Senate has reignited hopes from progressives over policy ideas that wouldn't have had much hope in a Republican-controlled legislature. 

But even as the state looks to tackle newer issues, older problems like road funding persists. The variable of fewer drivers paying a federal and state gas tax is forcing the state to consider other ways of paying for its road repairs. 

One study says Michigan has already missed out on $50 million in revenue from 2019-2021 and stands to lose $500 million by 2030.

Last week, several advocacy groups including the County Roads Association of Michigan called on the state to come up with new ways to raise money.

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Top of that list was a Road Usage Charge (RUC), which would tax electric vehicle owners for the number of miles they drive in their car or truck. The system has been tested for years, but remains a tricky program to implement for a number of reasons.

"The privacy issue is always front and center," said Eric Dennis, a research assistant with the Citizens Research Council. "To be charged while you're driving, you have to tell us where and when you're driving.

"Writing that into legislation - it becomes a big deal."

There are several ways drivers could calculate the number of miles they've driven, but Dennis said the most efficient system involves plugging in an onboard diagnostics tool dongle into the vehicle. In states like Utah and Oregon which have rolled out pilot programs that have tested the RUC system, the dongle sends the data to a third party company, which then passes it along to the state.

But both states' systems are voluntary and don't mandate reporting - partly due to the stickiness that comes with citizens' tracking location being sent to the government. Even attempts to authorize traffic enforcement in construction zones using cameras here in Michigan have been met with pushback over privacy concerns.

The Citizens Research Council assessed the feasibility of a RUC charge in a January blog post, with Dennis laying out other questions, like if heavier vehicles would pay a higher tax and what responsibility would drivers have to the system. 

It also weighed other ways of raising money that don't include tracking vehicles. Possibilities include an additional charge at electric vehicle charging stations, beefing up the price of electric vehicle registration fees or building a toll network. 

RELATED: Michigan could raise billions from toll network, state study says

However, EV drivers are already charged extra to register their car, paying either an extra $30 or $100 per registration, depending on the weight of the vehicle. 

To build a toll road system would require hundreds of millions of dollars and years of work, a report funded by the state transportation department found.

The investment for a RUC charge program may look and cost differently, but would prove no less difficult to implement. Several states have run into similar questions when deploying their own RUC charge pilot programs. 

Michigan lawmakers and other government workers should be aware of those obstacles before deciding on its own pilot program, the CRC advised. 

"We've been doing this for awhile, but there's not much inertia going that way," Dennis said. "It seems like there is a lot of talk, but not much momentum."