DelDOT Secretary: Toll hikes, EV fees may be needed

Shanté Hastings, who testified in a Jan. 28 confirmation hearing to become the permanent DelDOT secretary for Gov. Matt Meyer, said that toll increases should be under consideration after Maryland and the Delaware River & Bay Authority recently increased their fees.

Meanwhile, Maryland already charges those without Maryland transponders  $8 for E-ZPass at the northbound Interstate 95 toll at the Susquehanna River and $12 for toll by mail. The state did away with cash tolls several years ago.

Delaware’s tolls have remained unchanged for years, with the Delaware-Maryland border crossing charging $4 for passenger vehicles and the key Route 1 tolls charging $1 on weekdays and $3 on weekends. There is no difference between cash and EZ-Pass rates.

In Fiscal Year 2024, Delaware’s toll system raised about $222 million, while debt service payments on prior bonds was $82.2 million.

“I think [toll increases are] something that we should look at, definitely on the I-95 corridor, and potentially on the Route 1 and 301 corridors as well. I think it’s one of the things that we’ll look at to talk about potential revenue options,” Hastings said in response to a question by State Sen. Marie Pinkney.

Hastings was also asked about the impact of electric vehicles on the Transportation Trust Fund – which collects money from tolls, Division of Motor Vehicles fees, and the state motor fuel tax to fund future road maintenance and improvement projects.

Delaware’s Capital Transportation Program includes more than $1 billion in project spending over the next five years, which is paid for with bonds lent against the strength of the trust fund. The trust fund also allows the state to receive matching federal grants that add hundreds of millions of dollars annually.

Of the $638.7 million raised by transportation tolls, taxes and fees in FY 2024, about 20%, or $137.4 million, came from taxes on gasoline and diesel.

But, with more fuel-efficient vehicles hitting the market, that revenue stream is expected to flatten. Delaware is registering about 1,000 new alternative fuel vehicles every month, Hastings said, including electric vehicles  that burn no fuel and therefore pay no fuel tax.   

A study of the impact of fuel-efficient and electric vehicles on state coffers published last year by the University of Delaware found that, if current adoption rates continued, the state could lose an estimated $1 billion in revenue from the motor fuel tax between 2030 and 2050.

Those estimates led DelDOT to hold flat revenue projections for the motor fuel tax in coming years, Hastings said. 

Those projections – combined with increased employee salaries and health care costs, as well as rising construction costs – has convinced Hastings to begin thinking about new revenue models.

Delaware is one of only 11 states to not have instituted a special registration fee on electric vehicles meant to offset the loss of motor fuel taxes. It is the only state in the mid-Atlantic to not have one.

Maryland charges the lowest at $125 annually while New Jersey charges the highest at $250. While Pennsylvania has a $200 annual fee, it has planned numerous increases in coming years.

“The time is now to start talking about, what are the different options to either replace the motor fuel tax or a combination of things to address this issue?,” Hastings said. “So I think we will have discussions in the coming months to say, ‘Here’s what we see is the problem and here are different options.’ Many of them will take legislative action.”

Eight years ago, DelDOT won a federal grant to conduct a pilot project for road-use fees. Ultimately, the agency tested the system with about 150 people — mostly state employees — who plugged GPS devices into their cars that allowed state officials to record their miles driven.