Environmental groups urge phased approach to Vermont mileage-based user fee; agency says federal grant and scale favor mandatory path

At a Senate Transportation Committee meeting held virtually, witnesses representing environmental and EV-advocacy groups urged senators to adopt a cautious, staged approach to a proposed mileage-based user fee (MBUF) for electric vehicles, arguing that an immediate mandatory program could deter EV adoption and disproportionately burden lower-income drivers.

Rob Kidd, chapter director for the Vermont Sierra Club, told the committee he was concerned a mandatory MBUF would “cause a chilling effect into people adoption” of EVs and asked how the state would deduct out-of-state miles and protect lower-income households (Rob Kidd). Johanna Miller, energy and climate program director at the Vermont Natural Resources Council (VNRC), and her colleague Evelyn Seidner recommended starting with a voluntary enrollment option or an increased flat fee while the state completes transition-plan reporting and public education.

The testimony laid out four specific VNRC recommendations: start the program as voluntary (allowing drivers to pay a higher flat fee or enroll in the mileage reporting option); ensure any flat fee or cap does not exceed what an average internal-combustion-engine (ICE) driver pays in annual gas taxes; direct a portion of increased EV fees to EV charging grants (the Charge Vermont EVSE program administered by ACCD); and index fuel-related taxes as the vehicle fleet transitions. VNRC said a $89 infrastructure fee is currently in statute for EVs and that a proposal discussed in committee to double that to $178 would risk making the average EV driver pay more than some ICE drivers unless design choices are adjusted.

Patrick Murphy, state policy director at the Agency of Transportation, framed the agency’s position around scale and grant conditions. Murphy said the Federal Highway Administration awarded Vermont a $3,000,000 competitive grant that the agency expects to support implementation; he told senators that the agency’s grant work contemplates a mandatory implementation milestone (agency referenced an implementation deliverable by January 1, 2027, and a broader transition by September 30, 2028). Murphy also described an intended transitional design that would keep an $89 prepay option, implement a capped approach (the committee’s current cap in discussion is $178), collect mileage data and then move to per-mile charges once the data and systems are ready.

Committee members pressed both witnesses and the agency on equity, administrative costs and the international comparison. Members cited examples from other states (Oregon, Utah, Virginia, Hawaii) and questioned whether voluntary pilots in other states had succeeded at scale. Murphy said voluntary programs frequently failed to reach enrollment levels needed to control fixed administrative costs and that starting with EVs—where per-vehicle revenue loss to the transportation fund is highest—made sense as a first step.

Senators also asked for more clarity in writing about grant conditions and timelines: at least one member asked the agency to provide the grant agreement language that ties funding to a mandatory implementation milestone. The committee agreed to continue sectional review of the draft, seek more testimony and aim for a firm draft later in the week with the goal of voting in committee the following Thursday, subject to needed clean-up.

The committee did not take a vote on final language during this session; members and witnesses agreed next steps include (1) agency follow-up providing the grant terms in writing and further clarification on capturing out-of-state miles, (2) potential statutory adjustments to ensure a sunset or transition from a capped flat fee to a per-mile design, and (3) additional testimony on equity and EVSE fund allocation prior to a committee vote.