Republican Gov. Phil Scott wants the owners of electric vehicles to contribute more money toward the maintenance of Vermont’s transportation infrastructure, and he’ll be asking lawmakers this year to sign off on a new mileage-based user fee for EVs.
In his budget address earlier this week, Scott touted a spending plan that “doesn’t raise taxes or fees." During a press conference on Thursday, however, Scott said his administration will be presenting lawmakers with a bill in the coming weeks that would assess a new fee on EVs.
“We’re moving forward, with the will of the Legislature, on this, and we think this is the fairest approach at this point,” Scott said.
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The gasoline tax is one of the biggest sources of revenue for Vermont’s transportation fund. But as more and more residents switch to EVs, gas tax receipts are expected to decline.
Scott said that in order to draw down the federal funding that makes up the majority of Vermont’s overall transportation budget, the state will need to find a more sustainable source for state revenues.
“We have a small amount of money that we have to utilize to leverage bigger dollars from the federal government that isn’t going to last forever if we continue down this path with EVs,” Scott said.
Administration officials say the fee would, in 2026, generate an estimated $5 million annually in new revenue.
Asked about the governor’s proposal Thursday, Bennington Rep. Tim Corcoran, the Democratic chair of the House Committee on Transportation, said “there’s no doubt that option should be in play.”
“We have to find a fair way to fund the EV infrastructure,” Corcoran said. “And that’s one way of doing it.”
Vermont’s environmental advocacy community is on board with the plan in concept, according to Robb Kidd, program director for the Vermont chapter of the Sierra Club.
“It’s something that we’re going to need to do eventually to figure out how to bring in extra revenues,” Kidd said Thursday.
Environmental advocates had opposed instituting a mileage-based fee until EVs reached 15% of the market share in Vermont, and Kidd says the state is now on the cusp of hitting that threshold. As of July, according to Drive Electric Vermont, there were more than 15,000 plug-in EVs registered in the state, a nearly 50% increase over the year prior.
Kidd said the Sierra Club wants to ensure parity between EVs and conventional cars by using mileage-based fees for all vehicles, regardless of which energy source they’re powered by.
“If we’re all going to higher-efficiency vehicles, vehicles with other power sources, we should go to a one-size-fits-all program that’s not just assessing a fee exclusively on EVs,” he said.
Vermont is preparing for the implementation of a rule that will require 35% of all new cars shipped to auto dealers in the state to be zero-emission starting in 2026.
Last year, lawmakers and the governor agreed on legislation that established the state’s first-ever EV fee. The annual fee of $89 took effect on Jan. 1. The money will be used to subsidize the installation of EV charging ports at workplaces and multi-unit residential complexes. The mileage-based fee, if it goes into effect as the Scott administration proposes, will replace the annual fee.
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