This commentary is by Laney Smith, a student at the University of Vermont studying community-centered design.
States are discussing a temporary suspension of the fuel tax as a temporary relief to inflation. On the flip side, Vermont is discussing what it will do if it starts losing some of the funds generated by the fuel tax.
Fuel tax is often forgotten when paying for fuel; however, the benefits of the tax are present throughout our daily lives. At 30 cents per gallon (32 cents for diesel), the gas tax in Vermont accounts for nearly 12% of the price per gallon.
Thinking about it in dollars and cents savings, I too would support a suspension of the gas tax. A savings of 30 cents per gallon is an all-around savings and benefit — or is it?
Consider this: It costs me about $60 to fill my 2003 Subaru. Without the gas tax, I would pay $56, which puts an extra $4 in my pocket, at the expense of — what? The $4 I normally pay in taxes funds beneficial improvements to the Vermont transportation infrastructure, along with funding public programs.
In 2019, the Vermont gas tax generated $77.8 million — money that directly benefited the people of Vermont by improving roads and bridges, public infrastructure, home weatherization programs and cleanup funds. Let’s evaluate: A 90-day fuel tax suspension would save me approximately $48 and cost the state $19.45 million. Good thing or bad?
At the end of 2021, state leaders estimated there were 4,400 electric vehicles on Vermont roads. As we push forward with the state’s Comprehensive Energy Plan, there are expected to be 50,000 electric vehicles on the roads by 2025, and 166,000 by 2030. This bodes well for climate change; however there is worry about the revenue that is going to be lost due to the increase in EVs.
With the widespread increase in EVs, the state anticipates a loss of about $20 million, or 25% of the $77.8 million from gas tax. Rep. Diane Lanpher, D-Vergennes, chair of the House Transportation Committee, stated that “we need to move away from (the gas tax) as being a source of funding we rely on.”
In December 2021, Michele Boomhower, director of policy, planning and intermodal development at the Vermont Agency of Transportation, predicted the state is at least 18 months away from a new tax solution. Now, in May 2022, that deadline is down to 14 months and is continuously fast approaching.
If all this revenue is lost from the gas tax, how is the state going to replenish it? According to Boomhower, “with the current gas tax, if a car travels 12,000 miles a year and gets 20 miles per gallon, it uses 600 gallons of gas a year. In Vermont, that amounts to a total tax of $180 per year.” To make up that money, it would be necessary to add another tax.
Currently there is talk about adding legislation to place a tax on charging for electric vehicles. To many, this may come across as unfair because you are doing your part for the environment by using an electric vehicle, so why should you be taxed for charging it? A tax on charging for EVs is no different from a gas tax, and the benefits of this tax would still be the same — roads, bridges and infrastructure, things that are still needed even with the use of electric vehicles.
Or are we being shortsighted in all of our analyses and planning? Instead of focusing on the decision between less from the gas tax, or reallocating it to a new tax, should we be focusing instead on conservation?
Picture this: No more gas tax (that’s close to an extra $125 in your pocket every year), but you have to reduce your driving by 12%. If everyone reduced their driving by around 12%, our roads and bridges would see an immediate reduction in use and wear and tear. The demand for more infrastructure, parking facilities, and the improvements such as new traffic lights would diminish.
And the use of alternative modes of transportation such as walking, biking, or using public transportation would sustain existing infrastructure and alleviate future needs for improvements and rebuilds. And maybe, just maybe, we would all be smiling more with a few more dollars in our pocket.
