State pilot with 1,000 volunteer drivers could replace the 52-cent-per-gallon gas tax
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Overview
Updated 1 hour agoMichigan has taxed gasoline at the pump for nearly a century to pay for roads. Now the state is testing a replacement: charging drivers for every mile they travel, with 1,000 volunteers taking part in a pilot starting in early 2027.
Electric vehicles, which pay little or none of the 52-cent-per-gallon gas tax, are the reason. A 2026 report from Anderson Economic Group found EVs cut expected state gas tax revenue by $50 million from 2019 to 2021, and projected nearly $500 million in losses by 2030 if the funding model doesn't change.
Why it matters
Michigan's per-mile test could reshape how every state funds roads as electric vehicles drain gas tax revenue.
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People Involved
Organizations Involved
The state agency managing Michigan's transportation infrastructure and administering the pay-per-mile road funding pilot.
A coalition of county road agencies, government stakeholders, and industry groups formed to address the EV road funding gap.
A Michigan-based economic consulting firm that quantified the road funding gap caused by electric vehicles.
Timeline
September 2025 December 2027
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Final pilot report expected
Upcoming ReportMDOT plans to deliver the final report on whether per-mile charging is viable.
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Six-month trial run begins
Upcoming TrialOne thousand volunteers start testing the pay-per-mile system.
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Public education campaign scheduled
Upcoming OutreachThe state plans a public education campaign to raise awareness and recruit volunteers for the trial.
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State announces pay-per-mile pilot for road funding
Today AnnouncementMichigan confirms plans to test charging drivers per mile instead of at the pump, seeking 1,000 volunteers.
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Pilot planning phase begins
PlanningA consultant leading the pilot reveals initial planning started in June; a committee forms to recruit volunteers.
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Michigan lawmakers fund pay-per-mile study
FundingThe state allocates $7.65 million to study replacing the gas tax with a mileage-based road usage charge.
Historical Context
3 moments from history that rhyme with this story — and how they unfolded.
Federal gas tax freeze (1993)
The federal gas tax has been 18.4 cents per gallon since 1993. Congress has declined to raise it for over three decades, and the Highway Trust Fund has repeatedly faced shortfalls requiring transfers from general revenue.
Federal road spending has been propped up by general fund transfers since 2008.
The federal impasse pushed funding decisions to the states, which must find their own solutions.
Michigan's pilot is a state-level response to a revenue problem Washington has refused to solve for 30 years.
Oregon's OReGO pilot (2015)
Oregon launched the nation's first voluntary pay-per-mile program, letting drivers pay 1.5 cents per mile instead of the state gas tax. Enrollment was capped, and drivers could choose GPS, odometer reporting, or a flat-fee option.
The program proved the concept worked technically, with a modest volunteer base.
Oregon's pilot became the template for mileage-based user fee experiments in Utah, Virginia, and Hawaii.
Michigan is following Oregon's playbook — but with a larger state and a bigger revenue hole, the stakes are higher.
Virginia's EV highway use fee (2020)
Virginia became one of the first states to charge electric vehicle owners an annual highway use fee instead of a gas tax. The fee applies regardless of miles driven and has faced pushback from some counties over how revenue is distributed.
The fee closed part of the EV revenue gap but drew criticism for being a flat charge unrelated to road use.
Virginia's approach shows the political alternative if per-mile charging stalls: a simple fee added to annual registration.
This is the path Michigan takes if per-mile charging proves politically impossible — a flat annual fee on EV owners.
