ANNAPOLIS, Md. — With fuel tax revenue declining, Maryland legislators are exploring a mileage-based fee to fund transportation projects, following a four-month pilot program completed in 2024 to test its feasibility. House Bill 1457, now under consideration in the General Assembly, proposes a highway use fee for drivers of vehicles with fuel efficiency above 25 miles per gallon (mpg), while offering an optional Mileage-Based User Fee (MBUF) program. The bill would repeal a $125 annual surcharge on electric vehicles (EVs) enacted in 2024, replacing it with this new system.
“This legislation would replace the newly passed EV registration fee, that surcharge, and would also include those vehicles that are considered high efficient vehicles, which is above 25 [miles per gallon],” said Trish Hendren, executive director of the Eastern Transportation Coalition. Hendren’s team estimates 42% of Maryland’s passenger vehicles exceed 25 mpg. Based on an average of 11,245 miles driven annually, the proposed highway use fee would range from $5.83 to $182, depending on vehicle efficiency. “If you have an older, less fuel-efficient vehicle, it may just be a couple dollars. But if you have a newer, very fuel-efficient car, it could be at that higher end of that scale,” she explained.
Drivers can opt into the voluntary MBUF program instead, paying only for miles driven. “And that choice is, do you want to pay an annual flat fee, or do you want to just pay for the miles you drive?” Hendren said. “If I drive less, I’ll pay less.” During the pilot, participants tracked mileage via options like odometer readings without GPS, addressing privacy concerns raised by critics.
Senator Justin Ready opposes the measure, sponsoring SB557 to block vehicle-miles-traveled taxes. “If it was ever enacted, it would not be in lieu of a gas tax but would be on top of,” he said, noting HB1457 adds the fee atop existing fuel taxes for efficient vehicles. “I don’t want the government knowing how far I’m driving. I don’t think that’s any of the government’s business.” Ready also criticized transportation funding, arguing over half the Transportation Trust Fund subsidizes underused mass transit. “We’re recovering less than 10 percent of the cost with fares,” he said, advocating for fare increases over new driver fees.
Virginia’s similar model charges $6 to $128 annually for vehicles above 25 mpg, generating $91 million in fiscal year 2025. Maryland’s HB1457 could yield $47 million to $67 million annually, per estimates. Hendren sees it as a step forward: “The fuel tax after 100 years is not going to be our sustainable, reliable transportation funding source.” The HB1457 hearing occurred March 4, while SB557’s is set for March 13 at 1 p.m. in the Senate Budget and Taxation Committee.
