Illinois Vehicle Mileage Tax—Fix The Roads And Fund The Future

Illinois lawmakers appear to be considering a revival of the vehicle miles traveled (VMT) tax—an idea that was first floated in 2019 but proved dead on arrival. Instead of recoiling from it as “just another tax,” perhaps we should ask a more interesting question: what if the VMT tax is exactly what is needed to internalize the actual cost of road usage—not only in Illinois, but nationwide?

Illinois already levies the second highest gas tax in the nation, behind only California. Since 2019, that tax has been set to climb automatically each year. This has generated about $2.8 billion annually in revenue. However, gas taxes, like a new car driven off the lot, begin losing value the moment they’re implemented.

As vehicles become more fuel efficient and as electric vehicles (EVs) gain a larger market share, the traditional gas tax withers on the vine. This necessitates a hiking of the tax rate to make up for a decrease in the total amount of gasoline used. In other words, less gas burned means less tax collected—but unlike fossil fuel emissions, road damage doesn’t diminish with battery power. A Tesla weighs more than a Toyota Corolla. If anything, heavier EVs do more damage to roads per mile driven, not less. While they owners bypass the pump, they’re still tearing up the roads.

This is where a VMT tax starts to look attractive. Instead of taxing gallons, it taxes miles. In other words, it ties the road funding to the very thing actually causing the damage: driving. It transforms an attenuated tax on fuel into something of a user fee—not unlike a toll, but one that applies to all roads.

This is a great start, but if Illinois is going to pilot this, they should try to get it right. A tiered structure based on vehicle weight would better align taxation with actual pavement impact. After all, a 7,000-pound curb weigh Rivian R1T chews up infrastructure a lot faster than a Chevrolet Bolt.

The proposed legislation, SB1938, allows for variable pricing by time of day and by road type. This opens the door to potential congestion pricing and smarter infrastructure load balancing. While the bill doesn’t mandate it, there is nothing stopping the state from also tiering the fee by vehicle weight which, along with time of day and road type, would bring us even closer to matching tax policy with actual impact.

Critics contend that the VMT tax opens the door to all manner of Orwellian surveillance schemes. The proposal’s pilot program does entertain transponders and odometer photography, neither of which is ideal. However, it requires minimal data collection, explicitly prohibits personal information gathering, and offers non-GPS alternatives. It seems less like an Apple Watch for your Grand Wagoneer and more like a simple step tracker for your Corolla.

Most importantly, the pilot program is temporary and subject to legislative review. It must run for at least a year, with a full report due to the General Assembly within 18 months. The report must analyze not just revenue and logistics, but equity impacts, enforcement concerns, data security, and the potential for fraud.

Illinois is leading the way in infrastructure funding in part out of necessity. The state has already maxed out the gas tax regime. It has doubled the rate; it has tied it to inflation—and it is still projecting significant shortfalls in infrastructure revenue in the coming years. That isn’t a sign of a sustainable system, it’s the sound of a fiscal catastrophe approaching.

A VMT offers something different: a user fee that grows or shrinks with road usage, not oil prices or efficiency improvements. It is potentially more equitable, resilient, and future-proof.

Instead of reflexively fighting it, hopefully some Illinoisans might consider trying to make a VMT work—seeing it not as an addition to the gas tax, but an escape hatch from an ever-increasing tax regime. If Illinois can get this right, it could prove a template for the nation. The Prairie State isn’t the only one staring down the barrel of fuel efficiency—every state is watching its gas tax base erode while infrastructure crumbles.

A well-designed VMT system—tested small, tailored regionally, and scalable nationally—could be the first serious attempt to future-proof road funding in a generation.