Vermont discusses implementing mileage based user fees for electric vehicles

The Vermont House Transportation Committee convened on February 13, 2025, to discuss the potential implementation of a mileage-based user fee (MBUF) for vehicles, particularly electric vehicles (EVs). This meeting highlighted the ongoing shift in transportation funding strategies as traditional gas tax revenues decline.

The proposed MBUF would charge vehicle owners based on the total distance traveled annually, a model already adopted by states like Oregon, Utah, Virginia, and Hawaii. The committee emphasized that while the initial focus may be on EVs—who currently do not contribute to gas tax revenues—the long-term vision could expand to include all vehicles.

Key discussions revolved around the implications of transitioning from gas taxes to a mileage-based system. Representatives expressed concerns about the potential loss of revenue from out-of-state drivers, who contribute significantly to Vermont's gas tax—estimated at around 30%. This raises questions about how to structure the MBUF to ensure fair contributions from both in-state and out-of-state drivers.

The committee acknowledged that implementing an MBUF would involve higher startup costs and require new systems for collecting mileage data. This complexity necessitates careful planning and consideration of various factors, including rates, vehicle eligibility, and administrative processes. The committee is awaiting further proposals from the agency, which will provide detailed insights into the MBUF's feasibility and operational requirements.

In conclusion, the discussions reflect a broader trend towards innovative funding solutions for transportation infrastructure in Vermont. As the state navigates the transition from gas taxes to a mileage-based system, the committee will need to weigh the pros and cons of various funding mechanisms to ensure sustainable revenue for the future. Further presentations and reports are expected to clarify the next steps in this evolving conversation.