UPDATE, March 22, 3 p.m.: The Ohio Senate voted to allow a $5 license plate increase Wednesday as it passed a $7.8 billion state budget. Read the full story here.
Earlier story: Ohio motorists would pay $140 a year for license plates — a 306 percent increase over current fees — but get out of paying the state’s 28 cents per gallon gas tax, under a bill being pitched by state Sen. Bill Coley, R-Liberty Twp.
Replacing gas taxes with higher plate fees would generate the same amount of money for road and bridge projects but would mean people with fuel efficient cars or gas guzzlers would pay the same, he said Tuesday at a Statehouse press conference.
“We are consuming fewer and fewer gallons of gas for every mile driven and yet it’s not getting any cheaper to build roads. How do we address this and not act like Big Brother?,” Coley said. The solution is to boost the fee and give each vehicle an identification card to swipe at the gas pump to take off the state fuel tax, he said.
Truck registration fees would be higher than auto fees, he said.
Under Coley’s proposal, owners of fuel efficient cars may end up paying more for their $140 registration fee than they pay now in state gas taxes. For example, a car driven 15,000 miles a year that gets 35 miles per gallon would avoid $120 in state gas taxes but a car that gets 15 miles per gallon would avoid $200 in taxes.
Coley brushed off the idea that the structure would create a disincentive for buying fuel efficient vehicles. Even with the 28 cent per gallon tax knocked off, gasoline is still expensive, he said.
“I think you still want to encourage people to do that but look, the reality is that as Teslas and hybrids and stuff become more and more popular, we have to maintain our roads. Take it out to its logical conclusion and it’s all electric cars, who is paying for the roads?” he said.
There are 13.7 million registered vehicles in Ohio, including 8 million passenger vehicles.
Registration fees are $34.50 per year for passenger vehicles — a little more than what is charged in Indiana, Kentucky and West Virginia, in light with what Pennsylvania charges and less than Michigan’s fees. Some of the largest states in the country charge more for annual registration, including $225 in Florida, $101 in Illinois and $50.75 to $54 in Texas, according to the National Conference of State Legislatures.
Ohio’s gas tax is below the national average and less than all neighboring states except Kentucky, according to the American Petroleum Institute. It was last increased in July 2005, when the average fuel efficiency of new passenger vehicles was 30.3 miles per gallon compared, according to the U.S. Department of Transportation. The average increased to 36.4 mpg by 2014.
Coley’s proposal is not part of the state transportation budget bill that is expected to receive Ohio Senate approval on Wednesday.