State legislatures are revisiting the idea of charging drivers by miles driven as the long-standing gas tax loses purchasing power. Greater fuel efficiency and the rise of electric vehicles are eroding fuel tax receipts that have financed roads and public transport for decades, prompting renewed interest in a road user charge, also known as a vehicle miles traveled fee or VMT.
Why states are looking beyond the gas tax
Fuel tax revenue has been a backbone of state transportation budgets, but it is shrinking relative to need. New vehicle technologies and tighter fuel economy standards mean drivers buy less petrol per kilometre travelled, while electric vehicles bypass fuel taxes entirely. Many states have conducted studies or run pilots in the last decade to test mileage-based alternatives, but putting a mandatory, broad-based program into law has proved politically difficult.
A small number of states have moved beyond pilots. Oregon implemented the first state program that allows voluntary enrollment in 2013. Participants can report miles using either GPS-enabled devices or non-GPS odometer tracking, and they receive a credit at the pump to avoid double-paying. Utah runs an option for electric vehicle owners to pay per mile instead of an annual flat fee. Hawaii introduced an optional mileage-based charge for EV owners and plans to shift to an automatic system from 2028.
Federal transportation law has supported experimentation. The 2015 FAST Act directed funds toward state pilot programs to explore alternatives to the gas tax, and the Infrastructure Investment and Jobs Act included money for a national VMT pilot. Those efforts generated practical lessons about tracking mileage accurately, coordinating interstate travel accounting, and designing privacy protections, but they have not produced a widely adopted, turnkey model for states to copy.
Where proposals are gaining traction this year
Several state capitols are again debating how to replace shrinking fuel taxes. Lawmakers in Massachusetts, Illinois and Washington have each introduced proposals or study measures this session. In all three states, pressure from strained transit agencies has sharpened the focus on finding new revenue sources.
In Massachusetts, sponsors point to the need for additional support for the Boston-area transit authority, which still faces ridership and revenue shortfalls from the pandemic era. Proponents frame a mileage-based charge as a way to ensure all vehicle types, including electric vehicles, contribute toward routine road maintenance. The idea is being presented as part of a broader reassessment of how the state funds both highways and mass transit.
