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Transportation Funding Alternatives Studied

The Agency of Transportation (AOT) has completed a study of potential funding sources, other than motor vehicle fuel taxes that will be sufficient to maintain the State’s transportation system in the face of declining gasoline tax revenues. Gasoline consumption in Vermont has declined consistently since 2005. A general reduction in vehicle miles traveled (VMT), state investments in smart growth programs, transit, rail, park-and-rides, and carshare programs, the growth of hybrid and electric vehicles, and federal fuel economy standards have all contributed to reducing gasoline consumption. The drop in revenues threatens the ability of the State to adequately maintain its transportation infrastructure.

The report finds that in the long-run, motor vehicle fuel taxes will likely need to be replaced by more stable revenue sources that are unaffected by fuel consumption. Among the possible sources include various increased fees, changes to the purchase and use tax or other taxes, allocating more of those revenues to the transportation fund, or a tax on VMT. For more information on the study, contact Costa Pappis at VTrans: costa.pappis@vermont.gov.