Senate committee weighs mileage-based fee to shore up shrinking gas-tax revenue

The Senate Transportation Committee on Tuesday examined a transportation bill that would redirect local option tax surpluses to a new municipal transportation special fund, give tentative authority to issue transportation infrastructure bonds and phase in a mileage-based user fee (MBUF) beginning with battery electric vehicles in 2027.

Damien Leonard of the Office of Legislative Council walked committee members through the bill’s key provisions, including a pilot special fund that would transfer 75% of excess local option tax revenue to the new fund while leaving 25% in the pilot account, and a five‑year-plus plan for transitioning purchase-and-use revenues that currently support transportation. "This would provide that 3 quarters of that excess amount be transferred to the local option municipal transportation special fund," Leonard said while describing the bill’s language.

The bill would also authorize the state to issue transportation infrastructure bonds, subject to Capital Debt Affordability Advisory Committee (CDAC) reporting and treasurer consultation, and directs the Agency of Transportation and the DMV to develop transition plans and reports before the fee reaches all light‑duty vehicles.

The central and most contested element is the proposed…