Michigan to pilot mileage-based road charge to replace gas tax

Michigan is launching a pilot program to test a mileage-based road usage charge as an alternative to the state's gas tax. The program, which is expected to cost up to $7.65 million, is scheduled to begin in February 2027 and will run for six months with 1,000 volunteers.

The initiative was proposed by Governor Gretchen Whitmer, and lawmakers have approved the spending cap in the 2025 budget. The Michigan Department of Transportation (MDOT) has noted that participation is voluntary and that any permanent implementation of a mileage charge would require new legislation from the state legislature.

The shift toward mileage-based fees is driven by the rise of electric vehicles, which reduce traditional fuel tax revenue. While some policy experts suggest that a mileage charge could improve efficiency if it replaces the fuel tax, concerns remain regarding how to effectively charge out-of-state drivers and those who frequently cross borders.