Atlantic Cities

In Oregon, Pushing Ahead With Road Use Fees

In Oregon, Pushing Ahead With Road Use Fees
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If the gas tax were a fuel gauge, its needle would be quivering pretty close to Empty. As great as hybrid, electric, and fuel-efficient cars are for the environment, each new one to hit the road diminishes gas tax revenue. Even if states increased the tax — which many have refused to do for far too long — its long-term viability as a funding mechanism is doubtful at best.

The most compelling replacement for the gas tax is a vehicle-miles traveled fee. From a funding perspective, a V.M.T. fee would certainly level the playing field: instead of paying road taxes at the pump, drivers would pay based on how much they drive. But for some people, the idea of having the government track their every movement is just too creepy to accept.

The state of Oregon is trying to overcome those privacy concerns by exploring options for being tracked in a mileage program. In a new V.M.T. fee pilot program, still in progress, participants can choose from five mileage reporting plans, ranging in transparency from invisible to opaque.

"We have to somehow, some way, have people tell us how many miles they've driven," says Mary Olson, a commissioner at the state's department of transportation, and also a participant in the latest pilot. "If you want to use technology to do that, you run into privacy issues. Some people are very sensitive about that. Other people like me don't care at all. You can't have one solution. You have to have multiple solutions."

Oregon has been way ahead of the curve when it comes to implementing V.M.T. fees. The state's first concept study, completed in 2007, concluded decisively that "a mileage fee could be implemented to replace the gas tax as the principal revenue source for road funding." Nine in ten participants in that study said they'd support a V.M.T. program moving forward [PDF].

The new usage charge pilot program, which began in November and runs through the end of this month, involves about 40 volunteers from state government. Participants chose the tracking plan that best fit their privacy tastes and will pay 1.56 cents for each mile driven — receiving a credit for any gas tax paid during the test period. The idea is to make sure each tracking option works in practice.

"What we're trying to accomplish now is really the mechanics of it," says Olson. "The goal today is not to raise more revenue. The goal today is to try to figure out a collection system that is efficient and that we have confidence in and that addresses all the concerns the public has."

The five tracking plans vary in terms of oversight. Two are managed by the Oregon D.O.T., three by a third-party vendor. They also vary in terms of payment: some require setting up an online account tied to credit or debit information, others go the old fashion route of monthly bills payable by check.

The key difference is the tracking system. Two advanced plans track mileage data as well as movement with a G.P.S.; the advantage here is that users aren't charged a fee for driving on private or out-of-state roads — only public roads in Oregon. Two basic plans involve an odometer-type device that collects mileage data but has no G.P.S. to track movement. Users may end up paying a little more, but they're getting privacy in return.

The most primitive plan, for people who want the most privacy, uses no tracking device at all. Users pre-pay a flat fee that assumes a monthly mileage. At some point, say when the car gets official inspections, the odometer is checked and the difference between miles paid and miles driven is reconciled.

Olson has chosen the most advanced plan. She says she plugged a small device into her car's diagnostic port and set up an online account — the whole process took five minutes. She has a pretty typical commute pattern, going five days a week from her home in Oregon City to her office in West Linn.

She says that in December she drove a total of 336.6 miles, according to her online V.M.T. statement, of which 334.4 miles were taxed. Her V.M.T. fee came to $5.21, but she received a gas tax refund of $6.20. That left her account with a credit of 99 cents. To challenge the system, Olson says she used her car's actual odometer to track her mileage on private, non-taxable roads, and that figure squared nicely with the V.M.T. statement.

"The gas tax is a perfect tax. It's not invasive on the person using it and it requires very little effort on the agency that depends on that money for providing services," says Olson. "Trying to replace that is really difficult, because anything you try to do is so much more complicated than just pulling up to the pump and paying for gas."

The usual caveats apply when discussing a system V.M.T. As we pointed out last August, mileage fees don't exactly encourage greener cars. They also may be vulnerable to tampering and create equity problems, especially in corridors that lack transit options. (Some of those concerns can be addressed if a proper portion of the fee goes toward public transportation.)

Despite these cautions, Oregon is preparing to take its system public soon. The state legislature has prepared a bill that would implement a V.M.T. fee on all vehicles getting 55 miles per gallon or better. (The change only applies to car models beginning in 2015, however, and as currently written the law wouldn't go into effect until that year.) Olson says the bill will be introduced sometime in 2013.

"It has to happen," she says of a shift to mileage fees. "Realistically, given the age of the transportation system, and the demands of increasing population, you have to be prepared to raise the necessary funds to provide the citizens with the type of transportation system that they want."

Top image: Minerva Studio/Shutterstock.com. Inset chart courtesy Oregon Department of Transportation

Eric Jaffe is a contributing writer to The Atlantic Cities and the author of A Curious Madness (2014) and The King's Best Highway (2010). He lives in New York. All posts »

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