October 21, 2013
Vehicles along New York's 2nd Avenue.
Oregon is moving ahead with a controversial plan to tax motorists
based on the number of miles they drive as opposed to the amount of fuel
they consume, raising myriad concerns about cost and privacy.
The program, springing out of a recently signed bill, is expected to
launch in 2015 on a volunteer basis. But it’s charting relatively new
territory, and other states aching for additional tax revenue are sure
to be watching closely to see whether to imitate the model.
The problem for lawmakers is that the existing per-gallon gas tax has
hit a point of diminishing returns, as Americans drive less and
vehicles become more fuel efficient. The federal Highway Trust Fund,
which gives money to states for highway construction and repairs, for
example, has needed a congressional bailout four times since 2009, in
part the result of no federal gas tax increase in the past 20 years.
However, economists and civil libertarians are concerned about the
Oregon pilot project in large part because some mileage meters can track
and record residents’ every vehicular move.
Rick Geddes, a Cornell University professor, said the basic device is
okay because it is simply attached to a vehicle’s computer, which
cannot track locations.
“It’s just like using electricity,” he told FoxNews.com.
However, Geddes said privacy concerns could resurface should
governments expand the program and use SmartPhone or apps to track
movements and reward motorists who avoid congested roads and drive
during off-peak hours.
Mark Perry, a University of Michigan scholar, says the GPS or “black box” system is "particularly untenable.”
“It would force us to surrender our privacy,” Perry, a scholar at the
conservative think tank American Enterprise Institute, recently wrote
in a column for McClatchy Newspapers. “Each day more and more of us are
required to tell government agencies more and more about ourselves. Do
we really want the government collecting data about driving habits?”
Another concern is the cost of tracking devices -- including who pays and how deep the expense cuts into the tax coffers.
Oregon is purportedly considering several tracking methods for the
pilot project’s 5,000 volunteers ahead of the 2015 start date –
essentially allowing them to install mileage meters connected their
vehicles’ odometers or GPS systems that could better track non-taxable
miles on private and out-of-state roads.
The average cost of GPS is now about $200.
And a 2012 Government Accountability Office report states the costs
of a GPS system for 230 million U.S. passenger vehicles “is likely to
greatly exceed the costs of collecting fuel taxes,” absent any reliable
studies on the issue.
The report also acknowledges such a method would be “more equitable” for drivers but also points out the “privacy concerns.”
Critics also say state governments calculating the tax per mile and
mailing bills is another cost, and that people who use the most
gas-efficient vehicles could pay just as much as those owning
The Oregon plan -- approved and signed into law this year by the
state’s Democrat-run government -- would replace the 30-cents-a-gallon
state tax with one for 1.5 cents a mile, for those participating.
A state spokeswoman said Monday that the project is still in the
development stages with officials focused on public awareness, not
Still, she acknowledge residents with electric cars, who pay no gas taxes, “won’t be running to sign up.”
The incentive for states to pursue this kind of program could build
as cars become more fuel efficient, especially considering President
Obama wants new vehicles to get 54.5 mpg by 2025, up from the average
now of 23.5 mpg’s.
Motorists will still be charged the federal tax under the Oregon program.
At least a dozen other states have had similar but smaller pilot
programs. Oregon has had at least two other test programs, but this one
is the most expansive.
Gebbes acknowledges officials are stuck in a “what to do next”
situation regarding changes to the outdated system and moving closer to a
“user fee” system.
Congress and state governments rarely have the appetite to raise
taxes – with the exception of perhaps Virginia, which this year through
some creative changes to the state gas tax will generate a projected
$880 million a year for road projects.