As electric vehicle growth squeezes gas tax revenues, data helps states prepare

Read the full story from Pew.

Forecasters expect sales of electric vehicles (EVs), already at record levels, to grow at a breakneck pace in the years ahead. This transition from gasoline to electric-powered vehicles matters not only for car buyers and climate goals, but also for state governments. In the aggregate, fuel taxes provide nearly 40% of the revenue that states direct to their transportation funds—special accounts for transportation spending. Much of that could vanish in the coming decades.

Despite the attention on EVs, their sales remain a modest share of total vehicle sales. Still, state policymakers will need data to inform decisions about how to fill the funding gap that’s expected once sales increase. By producing long-term projections of gas tax revenue, state analysts can provide critical estimates for how quickly and how far gas tax revenue will fall. And that will help states implement sustainable transportation funding sources.

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