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Senate Transportation hears agency defend flexible payment options; flat-fee sparks revenue concern
Summary
Agency officials told the Senate Transportation Committee they favor multiple payment choices for a mileage-based user fee but warned a $225 flat fee would undercut revenue for high-mileage drivers; lawmakers asked UVM to model the fiscal impacts before deciding whether to include a flat-fee option.
Senate Transportation convened to review how Vermont might collect a mileage-based user fee, with Patrick Murphy, the Agency of Transportation’s state policy director, testifying that the agency supports multiple payment options — including estimated upfront payments, pay-as-you-go and end-of-period reconciliation — provided reconciliation happens within each mileage reporting period.
"We don't have an issue with the option of paying after miles have been calculated," Murphy said, adding that the agency seeks to preserve flexibility so drivers can pay an estimated amount up front or settle a calculated fee at the end of the reporting period.
Members pressed the agency over a proposed flat-fee option. Murphy said a $225 flat fee — discussed as an initial example — would roughly equate to about 16,000 miles at the committee’s working rate of roughly 1.4 cents per mile and could lead many higher-mileage drivers to choose the flat fee, producing a structural revenue loss. He asked the University of Vermont (UVM) to produce a chart modeling the revenue consequences; the committee requested that analysis be provided promptly.
Lawmakers also debated timing for payment after reconciliation. The agency opposed language that would allow drivers to stretch payments into the following mileage-reporting period (an amendment in the House Ways and Means version), saying it would complicate compliance; committee members signaled they do not support a full-year delay to pay and prefer either up-front or short-window reconciliation (45 days) after the reporting period.
The committee left the question of whether to include a permanent flat fee open, asking the agency and staff to draft clearer language that would sunset any temporary flat-fee option at a specified date if included.
The committee’s next steps: the agency will work with staff to refine statutory language and provide UVM modeling on the fiscal impact of flat-fee options so members can decide whether to keep, modify or sunset that option.
