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House advances FY2026 transportation bill, flags declining revenues and prepares mileage‑based fee rollout
Summary
H.488, the FY2026 transportation program, was advanced after committee and appropriations amendments. Reporters highlighted long‑term revenue decline from reduced fuel consumption, increased costs, and steps in the bill including indexing municipal aid to inflation and preparing for a mileage‑based user fee pilot.
The Vermont House on March 26 advanced H.488, the FY2026 transportation program bill, after floor presentation by the Transportation Committee and amendments from Ways and Means and Appropriations.
Committee leaders framed the bill against the backdrop of declining fuel‑tax revenues (65 million fewer gallons than peak usage cited), rising construction and materials costs, and a need to prioritize maintenance over new construction. The Transportation Committee presented the agency’s “white book” (the project list) and noted fiscal pressure: low projected revenue growth and higher projected costs for projects statewide.
Key provisions included indexing two municipal programs to inflation (Town Highway Structures and Class 2 Town Highway programs), technical updates for state rail ownership and rail trail use (including enumerated prohibitions and a civil penalty up to $300 for violations in certain state rail trails), changes to Green Mountain Transit’s service authority language to give the Agency of Transportation more flexibility, and a proposal to implement a mileage‑based user fee (MBUF) for plug‑in electric vehicles as revenues from gasoline decline.
Committee members described the MBUF as previously authorized in 2023 but delayed because a federal grant (and matching state funds) needed to redesign DMV systems is on administrative hold; the bill updates deadlines and authorizations and sets an earliest possible implementation window as July 2026 pending grant and legislative action on mileage rates. The MBUF is intended to capture replacement revenue for gas taxes from EVs; the approach ties annual mileage reporting to vehicle inspections and collection through the DMV registration system.
Appropriations replaced an earlier section directing $1.4 million from the Transportation Fund to EV charging access programs and included other spending authorizations tied to transportation fund revenues. Ways and Means reported minimal fiscal impacts for some sections; Appropriations noted the committee’s amendment and recommended the bill ought to pass.
On the floor the House adopted Appropriations’ amendments and ordered third reading. Committee members emphasized continuing pressures on bridge decks and paving needs and thanked appropriations for preserving transportation funds for infrastructure priorities.
