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Louisiana faces $563 million in fuel tax losses due to more fuel-efficient electric vehicles

Louisiana officials say they expect to lose more than $500 million in fuel tax revenue over the next 10 years because of increasing fuel efficiency and electric vehicles.

BATON ROUGE, La. – Members of the Louisiana Electric Vehicle Task Force met March 7 to discuss updated state fuel tax data and evaluate options to address the falling revenue.

Center Square reported that the task force’s Louisiana Legislative Auditor’s Office provided an updated report that said the state is expected to lose $563 million in fuel tax revenue through 2032 due to increasing fuel efficiency and electric vehicles.

The task force was presented with data from the Department of Transportation and Development that identified an $18.8 billion unmet need for transportation infrastructure in Louisiana.

The motor fuel tax represented approximately $620 million of the Transportation Trust Fund’s total revenue, which was approximately $2.2 billion in fiscal 2022.

The Louisiana Legislative Auditor’s Office projected that vehicle tolls would need to increase by $94 to $328 per vehicle over a 30-year period, depending on various factors and assuming no new transportation projects occur to fill the state’s transportation backlog remove.

The task force also discussed how other states charge fees for electric vehicles, how different vehicle types contribute to road damage, and whether the state can collect sales tax at charging stations. The state can collect sales tax on charging stations, but residential utilities are constitutionally exempt from sales tax, making this an issue.

The task force also heard from Jody Montelaro, vice president of public affairs at Entergy, regarding a pending listing with the Public Service Commission regarding the resale of electricity per kilowatt hour.

The task force is expected to regularly continue discussions leading up to the 2023 legislative session, which begins on April 10.

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