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Highway Use Fee Bill Seeks to Capture Declining Gas‑Tax Revenue; Backers Call It Fairer, Critics Warn of Complexity
Summary
Sponsor proposed a standardized highway use fee tied to vehicle fuel efficiency and annual mileage to make up for falling motor fuel tax revenue; supporters called it equitable and forward‑looking, conservation groups and think tanks urged parallel reforms; questions remained on revenue estimates and implementation timing.
Delegate Jared Solomon introduced House Bill 1457, describing it as “a highway use fee” meant to address declines in motor fuel tax revenue tied to improved fuel efficiency and increased adoption of electric vehicles. Solomon said the bill creates a bridge mechanism that standardizes what the average Maryland driver pays, then charges vehicles that are more fuel efficient a supplemental highway use fee collected at registration.
Why it matters: the state’s Transportation Trust Fund relies heavily on motor fuel taxes that have been eroded by greater vehicle fuel efficiency and electrification. Witnesses said a new mechanism is needed to maintain predictable revenues for roads, bridges and transit.
How the proposal would work: testimony summarized the formula Solomon described. The bill uses a baseline average fuel efficiency (the sponsor cited 25 miles per gallon for Maryland) and an average annual mileage (about 12,000 miles). Under the proposal, a vehicle that is more fuel efficient than the baseline would pay a small additional highway use fee at registration; electric vehicles would effectively be charged for the delta because their fuel efficiency is zero. The sponsor said the fee would replace the current separate EV and hybrid registration fees and that the measure is capped to vehicles under about 26,000 pounds (so not 18‑wheelers).
Revenue and distribution: the sponsor said initial MDOT projections put revenue in the range of $46–50 million annually but cautioned the fiscal note was limited and likely underestimated because it used a narrow vehicle cap. The Eastern Transportation Coalition and Reason Foundation testified on MBUF alternatives and pilots; Reason’s witness emphasized mileage‑based fees as promising and cited predictability and fairness. Environmental groups such as Chesapeake Climate Action Network and Sierra Club supported an equitable user‑pay approach and urged pairing revenue measures with investments in public charging and transit.
Questions from lawmakers focused on whether the estimate included repealing the recently adopted EV registration fees, how the fee would be collected (at registration), and whether the bill was indexed or adjusted over time. The sponsor said the formula includes a 15% discount to reflect variability in driving patterns and that MDOT would have three years to design a vehicle‑miles program as an alternative.
Ending: Supporters framed the bill as a timely, technology‑neutral way to preserve highway revenues as vehicles become more efficient; opponents and some committee members asked for greater clarity on net revenue, collection mechanics, and equity impacts for lower‑income households that still drive older, less efficient vehicles.
