By Ryan Holeywell, July 15, 2013
Oregon is poised to become the first state to charge drivers based on
how many miles they drive -- as opposed to how many gallons of gas they
purchase -- in a move that could foreshadow the future of how
transportation infrastructure gets funded.
The bill, passed by the legislature and awaiting Gov. John
Kitzhaber's signature, would allow up to 5,000 drivers to voluntarily
enlist in a new program in which they'd pay a tax of 1.5 cents for every
mile they drive in lieu of the 30 cents-per-gallon tax that drivers pay
in the Beaver State.
The newly-created program is the result of years of study by state
lawmakers and officials at the Oregon Department of Transportation, who
have viewed the gas tax as increasingly unsustainable for funding the
state's transportation and transit needs.
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Indeed, the per-gallon gas tax -- the primary tool used by the state
and federal government to fund transportation infrastructure -- is the
victim of competing policy goals. Governments encourage the use and
development of fuel-efficient vehicles for environmental reasons. Yet at
the same time, the success of those efforts means that drivers are
paying less for each mile they drive, even as their vehicles cause the
same amount of congestion and wear-and-tear on roads.
The switch to a transportation tax based on miles driven, as opposed
to gallons of gasoline consumed, is viewed as a way to more closely
align the extent to which drivers use the road network with the amount
of money they pay to maintain it.
"The bottom line is it's about fairness, and people who use the
system ought to pay for the use of the system," Oregon state Sen. Bruce
Starr told Governing last year.
The new, voluntary program came about after Oregon lawmakers
unsuccessfully pursued a plan to require mileage-based fees for the
state's most fuel-efficient vehicles.
James Whitty, manager of Oregon DOT's Office of Innovative
Partnerships and Alternative Funding, says the new program is a
milestone. For starters, unlike previous ODOT pilots, it's a permanent
program that doesn't have an end date. It's also much larger than
earlier pilots that explored the viability of miles-traveled fees.
More importantly, the system the state is developing will ultimately
be the same one it uses when, eventually, mileage-based fees become
widespread. The new system is set to launch in 2015, and ODOT is
expected to spend $2.8 million over two years implementing it.
Whitty says he expects the new program to provide more evidence and
information to lawmakers that they'll be able to use to create broader
Additionally, ODOT typically hasn't been permitted to do much in the
way of drumming up publicity for the issue. That would change under the
new program. "One of the cool things about the bill is that the
expectation of strong communication with the public means that ODOT will
be able to spend time and resources actually marketing the program and
finding a way to move the needle on public acceptance," Whitty says.
Indeed, the idea of charging drivers based on miles instead of
gallons has been controversial in some places, where the concept has
been labeled a "driving tax." One of the biggest hurdles to changing
public opinion about the concept are the privacy concerns that come with
the state tracking driving.
ODOT recently conducted a study of different options for calculating
drivers' mileage in anticipation of the day when a program like this
might be created. They considered a range of technologies for tracking
mileage -- including those with and without GPS.
Whitty says the department didn't want to pick a "best" option but
instead explored several that motorists might one day be able to choose
Pilot participants can use a simple device that counts mileage but
doesn't involve GPS. They can use a GPS if they want to avoid being
charged for driving on private or out-of-state roads. They can use a
smart-phone app that uses GPS -- but only when the app is turned on. Or
they can opt out of any measurements at all and just pay a flat fee.
Oregon has long been a leader in the study of mileage-based fees. It
first began looking at alternatives to the gas tax in 2001 and has
conducted several pilot programs since then that have gained national
attention in transportation circles. Many view the state as being on the
cutting edge of transportation funding.
A Congressional Budget Office report
published in 2011 suggested a miles-driven fee as a viable alternative
to the gas tax, and many national transportation experts have endorsed
the idea too.
Yet the issue hasn't gain traction at the federal level -- the White
House famously shot down the idea when former Transportation Secretary
Ray LaHood suggested it was worth considering -- and even pilot programs
are rare outside of Oregon.
Richard Geddes, director of the Cornell Program in Infrastructure
Policy, says the idea of a mileage tax shouldn't be that unusual to
people, given that it mirrors the same principle used by utilities like
water and energy providers: pay for what you use.
Geddes, who served on a federal commission that studied
transportation revenue options, says the real promise of mileage-fees is
that eventually, they could serve policy goals. If the fees were
dynamic -- so motorists paid more to drive during peak hours -- they
could become a useful tool to manage congestion.
Jack Schenendorf, a longtime staffer on the House's Committee on
Transportation Infrastructure, agreed that mileage-fees are prudent.
"The more states that innovate and experiment, the better," says
Schenendorf, who served on the same panel as Geddes. Programs like
Oregon's can help other states as well as the federal government learn
effective ways to adopt policies for the "post gas-tax era."
Still, he says, it will be a while before systems like the one
created in Oregon become widespread. "(A mileage fee), at least at this
early stage, have a whole set of issues layered on top it: how it will
work, whether it will be accurate, and privacy," says Schenendorf. "All
those issues still have to be dealt with. That's what pilot projects are
But, he added, mileage-fees are a long-term solution and will take
years to fully implement; in the meantime, shorter-term solutions are
needed to address the need for infrastructure funds at both the state
and federal levels.