ANNAPOLIS, Md. — Maryland’s General Assembly is considering significant policy changes aimed at reshaping how the state funds its roads and infrastructure maintenance. House Bill 1457 (HB1457), introduced during the 2025 legislative session, proposes a “highway use fee” targeting owners of fuel-efficient and alternative-fuel vehicles.
This initiative is driven by declining gasoline tax revenues—a direct consequence of the rise in fuel-efficient and electric vehicles (EVs)—that threaten funding for crucial transportation infrastructure.
The proposed legislation introduces an annual fee for vehicles achieving fuel efficiency of 25 miles per gallon or higher, including hybrids, plug-in hybrids, and fully electric vehicles. Motorcycles, heavy commercial trucks, and government vehicles are exempt. The bill outlines a sliding scale, with fees ranging from approximately $6 annually for marginally efficient vehicles to around $182 for highly efficient, fully electric vehicles, based on Maryland’s average driving patterns and current gas tax rates.
A unique aspect of HB1457 is its Mileage-Based User Fee (MBUF) program—a voluntary alternative allowing drivers to opt out of the flat fee and instead pay based on actual miles driven. This user fee is capped at the flat-rate fee to ensure drivers are not penalized for driving more than average. The Maryland Department of Transportation (MDOT) would manage the program, ensuring privacy protections by limiting data collection strictly to mileage, without detailed location tracking.
The legislation addresses equity concerns by emphasizing fairness, highlighting how the current gas tax places a disproportionate burden on lower-income drivers who often rely on older, less fuel-efficient vehicles. Delegate Jared Solomon, a sponsor, argues these drivers typically face higher gas tax payments because their vehicles consume more fuel per mile traveled. He asserts HB1457 rebalances this inequity by ensuring that drivers who can afford fuel-efficient or electric vehicles—and thus avoid paying their share under the current system—contribute more proportionately to road maintenance.
Supporters, including the Maryland Sierra Club, emphasize the bill’s fairness, sustainability, and alignment with climate goals. They underscore that the fees simply recoup revenue that efficient vehicles naturally avoid paying through traditional gas taxes, ensuring all drivers contribute equitably to road maintenance. Additionally, the Sierra Club highlights the MBUF program’s potential to incentivize reduced driving, complementing Maryland’s environmental objectives.
Opposition primarily focuses on privacy concerns and additional driver costs. Critics like Sen. Justin Ready argue the fee represents “double taxation” for drivers already paying gas taxes. Ready has been particularly vocal against the mileage-based approach, fearing potential misuse of collected data. Some environmentalists also voice apprehension about timing, suggesting the premature introduction of fees could discourage electric vehicle adoption.
Financially, the bill would impact roughly 42% of Maryland’s passenger vehicles—those achieving 25 mpg or higher. A typical hybrid sedan might see annual charges around $90 to $100, while fully electric vehicles could pay approximately $175—a modest increase from Maryland’s current flat EV surcharge of $125 for fully electric vehicles and $100 for plug-in hybrids. However, proponents emphasize these fees remain below or comparable to the average gas tax contributions made by conventional vehicle drivers, maintaining financial incentives to own efficient cars.
On the state revenue front, HB1457 would initially generate an estimated $10 million annually, potentially doubling by 2030. While modest compared to Maryland’s overall transportation budget, proponents regard it as a necessary step toward long-term funding stability. The bill positions Maryland alongside Virginia and Oregon, which have successfully implemented similar programs. Virginia’s model, in particular, demonstrates positive public acceptance and efficient revenue generation.
This legislative proposal places Maryland at the forefront of nationwide transportation funding reforms, directly confronting the reality of diminishing gas tax revenues. HB 1457’s approach seeks a delicate balance—promoting fairness among all drivers, maintaining incentives for fuel-efficient and electric vehicles, and securing stable transportation infrastructure funding.
The bill had a scheduled hearing on March 4 at 1 p.m. As of March 24, HB1457 remains under consideration by the House Environment and Transportation Committee.
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Is Maryland trying to have a Smart City/State approach no more driving 15 minute cities??
“This user fee is capped at the flat-rate fee to ensure drivers are not penalized for driving more than average.” So does that mean that after a driver hits the average miles per year they no longer have to pay the extra tax on gasoline? This makes zero sense!