In recent years, the Vermont Legislature has made major investments in the fight against climate change. And for that, we should be grateful. Vermonters want the state to be a national leader in this fight by decarbonizing the electric, transportation and thermal sectors.
But sometimes our policy doesn’t live up to these goals, and aspects of our recently passed transportation bill don’t do the state any favors in our shift to greener transportation. We were an early leader in electric vehicle adoption, but Vermont now risks slowing the tremendous progress we have made.
Buried deep in Vermont’s 2023 transportation law is a section that could potentially impose a double tax on electric vehicle drivers in an attempt to replace gasoline tax revenue. According to this legislation, Vermonters who own EVs will need to pay a mileage-based user fee starting in 2025, and the Legislature is required to start work on implementing a kilowatt-hour-based tax at public charging stations. The kWh tax is intended to collect revenue from out-of-state drivers but the people it would impact the most include low-income Vermonters looking to go electric.
Before lawmakers tee up a kWh tax, it’s important they take the time to understand what it is and the impact it could have on Vermont’s EV adoption. Let’s start with the basics: A kWh tax is similar to the gas tax that many drivers pay today. But instead of charging per gallon of gas, EV drivers pay a fee based on the amount of electricity dispensed at public charging stations.
In states with this policy, EV drivers are charged extra every time they top off on a road trip, a shopping trip, or almost anywhere outside their homes. We all agree that EV drivers should pay their fair share of road maintenance, but imposing a kWh tax on top of a mileage-based user fee is out of step with Vermont’s clear commitments to clean transportation. This isn’t just our opinion, but the consensus of Vermont’s Agency of Transportation, as well. In a recent report on the kWh tax, this agency — the people who know transportation in Vermont the best — warned, “Too little is known about how to technically implement a per-kWh fee and its cost implications to go forward at this time. The potential revenue generation for the foreseeable future is also insignificant.”
The intentions behind this legislation — ensuring all drivers help fund road maintenance — are good. But the fact is there’s a lot on the line with this new policy, and the numbers show there isn’t much to gain. It’s in the best interest of Vermont’s lawmakers to listen to the experts and learn the facts behind this policy before they start implementing it.
The drivers who will feel the sting of a kWh tax the most aren’t out-of-state drivers. They’re Vermonters who live in multifamily buildings — often those in low-income communities. These drivers are more likely to rely on public charging, and with a kWh tax in place, they’ll pay the price for it.
Penalizing low-income communities for driving electric isn’t just an ethical issue. The threat of a double tax on EVs will keep these drivers from purchasing one and ultimately delay Vermont’s EV adoption. In fact, the uncertain impact that a kWh tax would have on Vermont’s marketplace is enough to put any driver off of EVs.
When the rubber meets the road, it’s clear there are better options. Vermont can replace the kWh tax with either a yearly flat fee or a mileage-based user fee, which would ensure EV drivers pay their fair share for road and bridge maintenance, without putting the state’s green energy future at risk.