A bipartisan group of 10 senators wants to use unspent COVID-19 relief money and new fees on electric vehicles as two of the major ways to pay for their eight-year, $1.2 trillion infrastructure plan, U.S. Sen. Susan Collins of Maine said on Sunday.
The group outlined their plan on Thursday but provided few specifics. It would include $579 billion in new spending but limit it to core infrastructure like roads, bridges and broadband while setting aside social programs and a corporate tax hike favored by President Joe Biden.
It is the latest in a series of attempts to bridge an impasse on the issue between the White House and Republicans. Biden cut off negotiations with Senate Republicans last week, but the new bipartisan group quickly emerged from the sidelines of that deal. A group of 58 House members evenly divided between the parties has put forward its own $1.25 trillion proposal.
Collins, a Republican, told CBS’ “Face the Nation” on Sunday that the group has coalesced behind three funding methods: the unused stimulus money, a user fee for electric vehicles that do not pay gas tax and a financing model similar to one used for sewer and water infrastructure.
“There won’t be a gas tax increase and we won’t be undoing the 2017 tax reform bill,” Collins said, referencing her party’s sweeping tax-cut package.
The group may index the gas tax to inflation, however. The tax has not been raised since 1993 and the idea has been raised by Sen. Mitt Romney, R-Utah, with some Democrats are open to it. But Biden has rejected the idea of raising taxes on Americans making less than $400,000 annually, which could also doom the electric vehicle fee.
It’s unclear if this proposal will gain any more traction than others that have failed so far, though it has moved beyond those proposals with five Democrats in the group including Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, who are moderate swing voters in the 50-50 chamber.
The tricky part is paying for such a plan in a way that will satisfy everyone. Biden, who trimmed his initial proposal from a staggering $2.2 trillion to $1.7 trillion prefers the corporate tax hike over user fees such as gas tax hikes and tolls that business groups have long argued for. U.S. Rep. Jared Golden of Maine’s 2nd District pointed to increased IRS enforcement as a potential way to fund infrastructure last week.
White House officials met on Thursday with Democratic senators working on a bipartisan agreement. “Some questions still need to be addressed, particularly around details of both policy and pay-fors,” White House spokesperson Andrew Bates said.
Cabinet members and senior White House staff will “work with the Senate group to answer those questions as we consult with other Members in both the House and the Senate,” Bates said.
Bloomberg News writer Erik Wasson contributed to this report.
Republican Senator Susan Collins of Maine spoke about funding for a bipartisan infrastructure deal, including proposed fees for electric vehicle owners for acting as “free riders” by not paying a gas tax.
“There would be a provision for electric vehicles to pay their fair share of using our roads and bridges. Right now, they are literally free riders because they’re not paying any gas tax,” Collins said during an appearance on CBS News’ Face the Nation Sunday.
Newsweek reached out to Collins for clarification on the proposed fees, whether intending additional fees or using the ones already in existence for funding.
Collins’ comments have received criticism on Twitter, with some users accusing Collins of not representing citizens’ best interests, and some electric vehicle owners complaining about fees already in place.
Vox journalist Aaron Rupar called the proposal “completely absurd” in a tweet.
Another user wrote: “@SenatorCollins Why would you have fees on electric vehicles? Why are Republicans always trying to drag us backwards? Fix the tax system. Tax the multi-billionaires. Jesus Christ, we’re sick of this s**t. And yes, people, I’m embarrassed to say it’s true, Collins is my senator.”
The National Conference of State Legislatures (NCSL) website details fees already imposed by 28 states for electric vehicle users to make up for a lack of revenue in gas tax. The special registration fees are typically in addition to traditional registration fees, and 14 states have imposed a fee for plug-in hybrid vehicles that operate on both gas and electricity.
The annual fees for an electric vehicle range from $50 in Hawaii and Colorado to $225 in Washington. In 2019, Alabama, Arkansas, Ohio and Wyoming enacted bills that set or increased fees for electric vehicles to $200 a year, the NCSL reported.
Fees for hybrid vehicles that use both electricity and gas were increased from $32 to $48.75 in Iowa this year. While South Carolina does not have an annual fee, electric vehicles require a $120 fee and hybrid vehicles a $60 fee every two years.
Illinois proposed increasing the electric vehicle fee to $1,000 in 2019, when the fee had previously been an additional $17.50 on top of regular registration fees, the Chicago Tribune reported. It was ultimately settled at $258 a year, which was a $100 fee on top of the $158 regular registration fee.
The registration fees were created to make up for a lack of revenue from gas taxation, which helps pay for highway repairs and improvements. In 2019 and 2020, at least 19 states considered legislation that would add road user charges as an additional means of collecting infrastructure funding from electric vehicle owners, the NCSL reported.