The Vermont Senate is considering a proposal as of Apr. 9 that would introduce a mileage-based user fee (MBUF) for all passenger vehicles in the state by the early 2030s, while keeping the current gas tax unchanged.
The discussion comes at a time when declining gas tax revenue is creating challenges for maintaining Vermont’s roads and bridges. The proposed MBUF would start at 1.4 cents per mile and increase annually with inflation, potentially leading to higher transportation costs for drivers across the state.
Under the current proposal, both an MBUF and existing gas taxes would be collected from drivers, resulting in an estimated $180 more per year on average for most motorists. Rural drivers could see even higher increases due to longer travel distances. “While there may be a case for replacing the gas tax with an MBUF, lawmakers would need to ensure it does not create inequities for small business owners, rural drivers, and workers – especially as commuting costs can have a significant impact on a person’s willingness to work,” according to NFIB Vermont’s letter submitted to the Senate Transportation Committee.
Many states are facing similar road funding problems but are hesitant to raise fuel taxes further. A handful of states have adopted mileage-based fees primarily as alternatives rather than additions to existing fuel taxes. The original intent behind Vermont’s MBUF was also tied to ensuring electric vehicle owners contribute fairly toward road maintenance since they do not pay traditional fuel taxes but still use public infrastructure.
Alternative solutions have been suggested by Governor Scott and some lawmakers, including gradually shifting revenue from vehicle sales tax—currently directed into the Education Fund—into the Transportation Fund instead. This approach aims to better align vehicle-related revenues with their use on roads and bridges; however, legislative leaders remain cautious about potential impacts on education funding.
The National Federation of Independent Business represented hundreds of thousands of member businesses across various industries, according to the official website. The organization aimed to advocate for small and independent business owners in public policy discussions at federal and state levels according to its official website. Brad Close served as president and chief executive officer of NFIB per its official website. Policy positions were determined using a one-member, one-vote system according to NFIB, with advocacy extended across all 50 state capitals per its official site. The group influenced policy debates aimed at protecting small business rights according to NFIB.
