Planned EV fees aim to replace Vt. gas tax revenue

Published: Feb. 8, 2023 at 5:51 PM EST
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BURLINGTON, Vt. (WCAX) - Be prepared to pay an extra fee if you drive an electric vehicle in Vermont. As more EVs have taken off, drivers of conventional cars have been left to pay an increasing share of the road, public transit, and other related costs. After years of debate, state officials are getting closer to rolling out a proposal on how to make up for lost gas tax revenue.

It’s a fiscal dilemma VTrans has been planning for. “We have known all along that once folks start driving electric, they will no longer be purchasing gasoline and not paying the gas tax,” said the agency’s Michele Boomhower.

Now, VTrans has proposed lawmakers pass a mileage-based fee system for EV owners to cover those costs. “Everybody is used to paying a few extra cents every time they go to the gas pump and we wanted to replicate that so households wouldn’t be hit with a big extra bill,” Boomhower. said.

Mileage data is already collected when vehicles undergo an annual inspection and officials say data from odometers could be used to charge EV owners 1.3 cents per mile. “The idea is to structure a rate that is what the average Vermonter is paying right now in fuel taxes,” said VTrans’ Patrick Murphy. They estimate that comes out to about $150 a year.

The agency is currently working on a way to ensure Vermonters don’t owe that as a one-time payment and rather pay it incrementally throughout the year. The proposal would also have people with plug-in hybrids pay an extra $57 per year when they renew their registration. Altogether, this would replace about $1 million in revenue.

VTrans officials say the state has made progress on things like EV infrastructure and sales and that EVs now represent about 8% of vehicles on the road.

But some environmental groups, including the Sierra Club, are concerned a fee on EVs could slow down the state’s progress. “We want to incentivize people adopting EVs, we don’t want to be adding fees,” said the group’s Robb Kidd. He says a fee should only be implemented when the state hits the 15% mark. He says the loss of gas tax revenue shouldn’t fall solely on EV owners and that overall vehicle efficiency is also cutting into that revenue. “We have to look at this as a comprehensive solution, not just targeting the EVs as a problem.”

State officials say the state is already on track to hit that 15% threshold, so planning now will benefit Vermonters later. “Good investment in processes and understanding what we need to achieve -- and when we need to achieve it -- takes planning,” said Vermont DMV Commissioner Wanda Minoli.

Officials say the earliest such a proposal would roll out is the summer of 2025.

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