An electric vehicle plugged into a fast charger in Rutland in 2022. File photo by Glenn Russell/VTDigger MONTPELIER — A proposal to charge electric vehicle drivers a fee based on how many miles they drive, meant to make up for the taxes those drivers don’t pay at the gas pump, is coming toge ther in the Vermont House after years of planning. The levy, which drivers would likely start paying in 2028, is part of a larger transportation policy bill that cleared the chamber’s tax and budget-writing committees this week and is now slated for consideration on the House floor as soon as next Wednesday. Vermont’s Agency of Transportation has been developing a potential structure for the fee since 2023. But this week, details on how the fee would work became more clear. The charge is one solution legislators are considering this year to help plug a shortfall in state funding for transportation projects that could leave federal dollars on the table and has already led the transportation agency to slash dozens of staff positions.  READ MORE Under the bill, H.944, EV owners and lessees would be assessed 1.4 cents per mile on their annual travels. An odometer reading would be recorded during their car’s annual inspection and reported to the state Department of Motor Vehicles. From there, the DMV would calculate how much the driver owes and send a bill by mail or online.  Drivers could choose to pay their bill all at once or in monthly or quarterly installments. Notably, the mileage-based fee would replace the current fee of $89, on top of the cost of a vehicle registration, that EV drivers started paying under a law passed in 2024. Those with plug-in hybrid vehicles, which have internal combustion engines, wouldn’t see any changes under the bill moving through the House this year. According to the latest version of H.944, the first mileage-based fee EV drivers would pay would be based on how far they’ve driven between the two inspections they get after January 1, 2027 — so the state wouldn’t start collecting revenue until 2028. That revenue could amount to between $350,000 and $1 million in the 2028 fiscal year, which runs from July 2027 to June 2028, and some $2.5 million in the year after, according to the Legislature’s Joint Fiscal Office. All the proceeds from the fee would be deposited into the state’s Transportation Fund. Economists from the Joint Fiscal Office also estimated that the new fee would cost the average EV driver in Vermont $154 a year, based on an annual mileage of 11,000 miles. The 1.4 cents per mile rate was set using research from a February University of Vermont study on the proposal. Supporters — who include Gov. Phil Scott’s administration — have framed the bill as a way to make sure drivers are paying their fair share of costs for using the state’s roads. The legislation also won bipartisan support in House committees this week. Gasoline tax revenue is one of the state’s main funding sources for paving roads, building bridges and completing other infrastructure projects. But that revenue source has been in steady decline as more people buy EVs, and gas vehicles generally become more fuel-efficient. “For a long time, we’ve had this inherent unfairness because of the way that fuel efficiency, and the development of electric vehicles, has taken place,” Patrick Murphy, state policy director for the Vermont Agency of Transportation, told the House Ways and Means Committee on Thursday. “You have vastly different amounts that are being paid by different vehicles, even though their impacts on the road system is fairly similar.” Four other states are in the process of rolling out a mileage-based fee — Hawaii, Oregon, Utah and Virginia — though the details in each vary. The House Ways and Means Committee made a number of changes to the bill, as it was first developed by the House Transportation Committee, on Thursday.  Those included adding a new 1% tax on the total cost people pay to rent a car, if that car is a fully electric vehicle. EV rentals otherwise would not be subject to the mileage-based fee. The tax-writing panel also removed a proposal to let EV drivers proactively pay certain amounts to the DMV throughout the year and then receive a true-up from the state after the fact. That could have brought in some new fee revenue to the state sooner than the 2028 fiscal year, said Rep. Matt Walker, R-Swanton, who chairs the Transportation Committee, in an interview. Walker said he expects his committee will support the Ways and Means panel’s changes in an unofficial straw poll next week. One question, too, is whether the state will ultimately expand the mileage-based fee to all drivers, not just those with fully battery-powered cars. Legislators have discussed a possible timeline of the early 2030s. But that’s likely to be a far more controversial idea — and one that doesn’t have support, at least now, from Scott’s administration. “Any conversation, I think, about including all vehicles in Vermont is very premature,” Joe Flynn, Scott’s secretary of transportation, said at a press conference last week. Read the story on VTDigger here: A new electric vehicle fee is taking shape in Vermont. ...read more read less