Final Reading: Vermont House, Senate may be at odds over a proposed fee on electric vehicles

April 26, 2024

18 5 minutes read

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Split image of a woman with glasses speaking in a classroom on the left, and a man in a suit with a patterned tie speaking on the right. — Rep. Sara Coffey and Sen. Andrew Perchlik. Photos by Glenn Russell/VTDigger

One of the biggest questions facing transportation policymakers today — not just in Vermont, but across the country — is about balance. As more people switch to electric vehicles, how should states make up the lost gasoline tax revenue, while still keeping EV adoption attractive?

Vermont’s Agency of Transportation is working up a replacement for the money that EV users don’t pay at the pump: an annual fee based on how many miles one drives. The state plans to have this “mileage-based user fee” in place once at least 15% of new cars sold here are electric.

But it’s not clear exactly when the state will hit that threshold. Right now, about 10% of all new cars in Vermont are fully electric, according to dealership data. And lawmakers noted it could be years, regardless, before the mileage-based fee is ready to roll out statewide.

This week, the Senate passed a measure that would create a different fee for EV users in the meantime — with the revenue committed to building out much-needed vehicle charging infrastructure. The fee could go into effect as soon as October.

Senators included the proposal in their version of this year’s annual transportation bill, H.868. It wasn’t in the House’s version of the bill, though — something transportation committee leaders suggested could be a sticking point as they hash out their differences in the coming weeks.

The Senate’s fee would apply to both plug-in hybrids and fully electric vehicles. EV users would pay $89 a year, which is designed to mirror the cost of an annual car registration that all drivers already pay. The fee for hybrids, meanwhile, would be half as much.

Plans are for the fee revenue — estimated to be about $915,000 in fiscal year 2025 and $1.7 million in fiscal year 2026 — to fund charging stations at businesses and multifamily housing developments. (The money would be directed to the state’s transportation fund.) The Senate also called for its new fee to be repealed once a mileage-based user fee takes effect.

Sen. Andrew Perchlik, D/P-Washington, chairs the Senate Transportation Committee. He said in an interview Friday that access to chargers is “the most important issue” for lawmakers to address to make EV adoption more practical, noting the proposed fee revenue would help. He said there are federal and state incentives available to make EVs more affordable, too.

But other lawmakers believe that adding a new fee onto EV ownership while the market is still developing could make people less likely to give up on gas. Among them is House Transportation Committee Chair Rep. Sara Coffey, D-Guilford, who said she thinks the state should wait to levy any kind of fee on electric vehicles until hitting the 15% threshold.

A group of environmental organizations wrote to members of the transportation committees last week urging the same. The threshold was set out in Vermont’s 2021 Climate Action Plan.

“To me, it’s putting the cart a little bit before the horse,” Coffey said in an interview Friday.

The House version of H.868 also proposed $1.7 million to build out new chargers, though it relied on a transfer of federal transportation grant money to do so. The Senate cut that measure from the bill, though, effectively replacing it with the proposed fee.

VTrans supports the Senate’s proposal, Perchlik said. He said he considers it a priority to get the proposed fee in the version of the T-bill that both chambers ultimately sign off on.

Transportation committee leaders said they expect to hold a committee of conference on H.868 as soon as next week.

— Shaun Robinson

In the know

The senate will vote Tuesday on whether or not to confirm Zoie Saunders as education secretary, according to Ashley Moore, chief of staff for Senate President Pro Tempore Phil Baruth, D/P-Chittenden Central.

— Ethan Weinstein

On the move

Vermont’s Senate passed a bill Friday aimed at streamlining interactions between health care providers and insurers, after a flurry of last-minute back-and-forth over the legislation.

Lawmakers rejected a push to delay some of the provisions of the bill, H.766, but adopted an 11th-hour amendment changing the language around primary care requirements.

As a whole, H.766 seeks to reduce the amount of bureaucracy and paperwork Vermont health care providers face when dealing with insurance companies.

“We took testimony from providers who indicated they spend as much as two to four hours per day on paperwork,” Sen. Ginny Lyons, D-Chittenden Southeast, said on the Senate floor Wednesday while reporting the bill. “That’s two to four hours of not seeing patients — in the face of overwhelming health care workforce shortages and clinician burnout.”

On the campaign trail

Gregory Thayer, a Rutland accountant and former local GOP committee chair, is again seeking the Republican nomination for lieutenant governor.

Thayer sought the party’s nod in 2022 but lost to longtime former state Sen. Joe Benning, R-Caledonia. In a press release announcing his campaign on Friday, he called himself a “life-long Vermonter and Conservative.”

In the 2022 race, Thayer aligned himself with former President Donald Trump and his agenda. Thayer also told VTDigger at the time that he was “proud” to have attended the Stop the Steal rally in Washington, D.C. that preceded the storming of the U.S. Capitol on Jan. 6, 2021.

— Shaun Robinson

Secretary of State Sarah Copeland Hanzas, a Democrat first elected in 2022 after serving for 18 years in the Legislature, announced on Friday that her reelection campaign will launch next week.

A press advisory said that Hanzas will highlight her accomplishments and “share her vision for the future of Vermont’s democracy” at an event at the Statehouse on Wednesday.

— VTD Editors