By on February 1, 2011

My home state of Oregon has the unfortunate distinction of pioneering the practice of pay-permile taxation, having studied the GPS tracking approach to road taxes in a pilot program back in 2005-2007. Originally, the track-and-tax scheme was envisioned as a replacement for the gas tax, but now it’s being raised as a way of taxing motorists who go without gasoline altogether. The Eugene Register Guard reports

A bill before the Oregon Legislature aims to deal with the government’s potential beefs with a growing fleet of cars and trucks that never stop for fuel at a gas station: that they don’t ever pay the gas tax that helps cover the cost of state and local road construction and maintenance.

Under House Bill 2328, those drivers would pay a “vehicle road usage charge,” starting with model year 2014 electric vehicles and plug-in gas-electric hybrids.

Proponents say the bill will build on lessons learned from the pilot testing, and avoids the legitimate concerns about pay-per-mile which were first raised by the pilot project’s report. But does taxing EVs actually make sense, or is this just the politically-palatable first step towards an Orwellian nightmare of GPS vehicle tracking? Meanwhile, doesn’t the State of Oregon give up to $750 in tax credits for EV purchases? Mixed messages much?

Getting back to the pilot project’s concerns, the first major issue was cost: at 1.2 cents per mile, the pilot program’s pay-per-mile rate often raised driving costs above what would otherwise be paid in gasoline taxes. The Reggie reports

The latest fee would be set at 0.6 cents per gallon. That means an electric car driven 15,000 miles a year in Oregon would cost $90 in fees.

That is on par with what a 48-miles-per-gallon Toyota Prius hybrid costs in state gas taxes (at 29 cents-per-gallon) for the same distance traveled. And it’s half what the driver of a 24-mpg vehicle would pay in gas taxes driving the same distance.

OK, that seems fair-ish. Now what about the whole Orwellian nightmare business? How can government track miles driven without actually tracking everyone’s vehicles? According to JimWhitty, director of the (Orwellian-sounding) Office of Innovative Partnerships for the state Department of Transportation

The bill also requires the development of an option of tracking and reporting miles driven to protect drivers’ privacy by avoiding the use of “vehicle location technology.” Instead, that option is likely to rely on technology to transmit remotely miles driven as recorded by the vehicle’s odometer

Those drivers would need to use a log book or other method of documenting miles driven off of Oregon roads — for example, in other states — so they can seek a refund for the fee paid on that travel.

That option will likely be opt-in, but hey, it’s an option. And it’s not one that Ray LaHood ever offers when he gets wistful about pay-per-mile. In fact, I might even venture to say that this workaround could split the reasonable privacy activists from the crowd outside the tinfoil haberdasher. Sure enough, the RG reports

Although the bill has yet to be scheduled for a hearing or to receive widespread debate, it has the potential for bipartisan support.

Which is not to say Oregon has thought this whole thing through, or that the DOT should look seriously at this at the federal level. For one thing, more bureaucracy is a given in any kind of pay-per-mile scheme. For another, this proposal runs counter to Oregon’s strategy of encouraging EV use through consumer tax credits, to take advantage of local hydroelectric power. Finally, passing track-and-tax for EVs only makes it more likely for intrusive pay-per-mile schemes… and even with the ability to opt-out from direct tracking, privacy issues are inevitable. Most importantly of all, none of this should distract politicians from the tough but necessary business of raising gas taxes. If EVs need to pay their fair share for road use, governments can remove consumer-side incentives and/or add a flat road tax (remember, even with tax breaks, EVs will not be bought by anyone making a pure “dollars and cents” decision).

Pay-per-mile, though appealing in theory, is a dangerous road to head down.

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28 Comments on “Oregon Debates Pay-Per-Mile EV Tax...”

  • avatar

    I’d say give the EVs a free pass at least while the various governments are trying to encourage EV sales.  5 or 10 years from now when the subsidies, tax credits, carpool lane privilege, etc have run their course, you can go back and think about a miles-driven tax.

    Here in the Bay Area, many of the same people who are interested in an EV are the exact same people most opposed to government GPS tracking. GPS tracking on EVs would seriously hurt their popularity.

    Maybe a cheaper and more palatable use tax system: time-of-use tracking. You could tax based on number of hours run and tax the rush-hour hours at a higher rate than the off-peak hours. That could generate revenue while simultaneously load-balancing the road system. If it is just “time that the car is running” then there is no need to collect speed or location data. It might even cut down on needless idling in parking lots.

    • 0 avatar

      Ed, that is enough of a socialistic tax grab to qualify as a platform for our very left-leaning NDP party here in Canada. Are you certain that Oregon isn’t a province in Canada?

    • 0 avatar

      I have to oppose any proposal that grants extra access to public infrastructure to people wealthy enough to pay extra for it. (That includes all the wildly popular “congestion pricing” schemes for tolls and diamond lanes, as well) Public infrastructure is for the benefit of ALL the public. Period.
      If we really are to have a gasoline-free transportation system (which seems to be the goal of the navel-gazers attempting to force it into existence, and damn the realities), we’ll need to come up with some sorce of roadway funding besides gas taxes. An annual weight and mileage-based vehicle tax seems reasonable.

  • avatar

    I could certainly see such a scheme eventually morph from ” track miles driven for tax-collecting purposes” to “track rate of speed at which those miles are driven for tax-collecting purposes.”
    Springing any form of road tax on electric-only vehicles before said cars have become the norm and with the infrastructure to support them may just kill the whole endeavor. Potential EV buyers will see the Orwellian writing on the wall and choose instead to keep driving ICE vehicles. And the extremists will continue to run their VW TDIs on home-brewed bio-diesel.

  • avatar

    How can government track miles driven without actually tracking everyone’s vehicles?
    There is this thing called an odometer. I understand that they have become quite tamper-resistant. Many states already designate agents to inspect cars for safety. Use them to read the odometer and charge a fee equivalent to the cost of a Starbuck’s coffee for filling out a form for the state. Problem solved. No magic transmissions from automotive ECUs to some as yet unspecified auto-specific wifi hotspot system is needed.
    Life is complicated enough; why unnecessarily add more complications?

    • 0 avatar

      Instant complication to your proposed scheme: How can (for example) Oregon tax for miles driven in Washington, Idaho, Nevada, or California (immediate neighbors)? Especially when the largest metro in OR sits right on the border with WA.
      In theory, the gasoline tax spreads this out pretty evenly. Not so a straight odo reading.

    • 0 avatar

      They also suggest a mileage log book. For $90 a year in use tax, I would be too lazy to keep it up. As Ed points out, it certainly is a mixed message to give a tax credit to purchase an EV and then do an annual claw-back for road usage.  But if you have a favored gas station in OR but do most of your ICE driving in WA, you have the same type of problem – WA roads being used and OR collecting the maintenance/construction fees. And what about those folks who use biodiesel, huh?

    • 0 avatar

      Semi Tractors have had this same issue since the dawn of interstate motor freight in the 1920s.  A power unit with 300 gallons of fuel can travel through 12-15 different states and provinces on a single tank.
      Diesel fueled vehicles used interstate log all mileage and pay each state traveled in a prorated share of taxes.
      All you would need to do this is a smart phone app or a GPS with logging software that generates a report of miles traveled in each state payable quarterly or annually.
      To Quote Regan:
      “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

      I’ll echo the comments of others that it is quite schizophrenic for a government to be subsidizing and taxing an emerging technology.  EVs have to be moving before we get to the tax & regulate phase.

    • 0 avatar

      yeah, this seems like a no-brainer.  No additional infrastructure or big brother tracking needed because when cars go in for their annual emissions testing (which I assume Oregon has), the odometer reading is recorded and reported already.   Then just bill for miles used since last inspection, either pay at the inspection station or get a bill later from the state.
      The objection that not all miles will have been driven in Oregon is true enough but not that compelling.  You could say the same for the property and other taxes paid on cars.  But if people insist, they could opt in to the GPS tracking method to ensure they are only charged for miles driven in Oregon.  And then what would happen is neighoring states would say, hey, since you’re tracking and billing it anyway, remit to us for the miles driven in our state, kthx.   So it would just be easier and simpler and no more expensive to just pay at the inspection station for all the miles.

  • avatar

    Anybody who’s worried about the government tracking their whereabouts in a car had better not ever carry a cell phone. Your cell phone knows where it (and you) are all the time. The government can access that information whenever necessary. Oh, and don’t use any credit cards, debit cards or ATMs, either. Privacy’s over, whether we like it or not.

    And if fuel taxes are supposed to be used only to build more roads or maintain existing ones (a terrible idea), wouldn’t a per-ton-mile-driven-tax be fairer than a per-gallon-purchased tax? They could put little sensors on the springs to measure the load.

  • avatar

    Paul, spot on regarding the insanity of offering incentives to buy EVs while coming up with convoluted Big-Brotheresque schemes in order to tax them.  I really hate the idea of the government tracking our every movement….more than they do already.
    Totally off topic, but the reporter on that OPB story was my news director when I worked in college radio.

  • avatar

    Stigmatizing EVs with a tracking device would certainly be counterproductive. As a practical matter, it seems that nearly all EVs will be recharged via 240V chargers, either at home or at public chargers. Wouldn’t it make more sense to find a way to add a tax to the electricity pumped thru those chargers? This would also help address the question of miles driven outside of the state (assuming that recharging would also happen outside of the state).

  • avatar

    I drive on Oregon roads a fair bit as I live in SW Wa. The roads are in tough shape; parts of OR 30 for example are ravelled and alligatored beyond easy repair/patching and US 101 south of Seaside floods regularly in the winter. The state needs to do something to maintain them as well as the HUNDREDS of old bridges. They just raised the gas tax by ~ 6 cents. For you @sshats that enjoy ragging on the government and want to pay zip for the pleasure of driving on a public road, well, enjoy $hitty roads.

  • avatar

    Start out at 0.6 a mile, no one complains. Wait until a sizeable number of EVs are registered ( a few years maybe) then knock em with 1.2 a mile. Don’t like it?  To bad. Try and sell the car with everyone knowing it comes with a 1.2 a mile tax.
    This is akin to property tax on a moving object. If it rolls in Oregon, we tax it.
    Or you could move somewhere they don’t have such schemes. Nearby states might pick up on this and advertise it.

  • avatar

    Another way is what the Swiss have been doing for years: if you want to drive in a Swiss road, you MUST buy a permit with a corresponding decal, regardless of your residence or destination, valid from date bought to yearend. No exceptions, either you show it at the border or buy it there. Locals buy them every december.

  • avatar

    Beyond the obvious privacy concerns, by the mile pricing doesn’t sense because miles aren’t interchangeable.  The urban gridlock commute where most of those road dollars go covers hardly any miles.

  • avatar

    There’s an idea sweeping the nation, but it apparently hasn’t reached Oregon yet: don’t raise taxes, lower spending.
    If you believe the spy tax will be used only for roads, you probably also believe red light cameras are strictly for safety.
    If you believe a bureaucracy and private vendors can efficiently collect taxes, you probably also believe charities getting only 10 cents of your donation dollar is reasonable.
    If you believe the GPS data won’t be used against you, you probably also believe your facebook page is private and secure.
    If you believe states should charge extra taxes to maintain roads, you probably believe building and maintaining infrastructure is not a basic responsibility of government, to be paid out of normal revenues.
    This is the intersection of politics and autos. A government that wants to track you in your car is going too far, and needs to be cut back. TTAC has been great at exposing the sham of red light cameras, but this is an even bigger threat to the freedom of the open road. This needs to be exposed for what it is, a high tech tax grab.

  • avatar

    i was thinking of this too.  But a couple things (living in Germany at the moment).  First, is EVERYONE, except the Swiss, hates them.  You pay $40 if all you’re doing is driving straight through Switzerland for 3.5 hours on your way to italy.  Or if you drive across the border to ski for a day.  Austria is a bit better, allowing you to buy shorter passes.  But it is still annoying as crap to have to stop and buy the sticker.
    2nd, these aren’t country borders here, how the heck would you setup any sort of monitoring?  You don’t have border patrol sitting around oregon checking every car that passes.
    And I agree with JaySeis on paying this stuff.  I don’t know WHY the gas tax is so taboo in America.  It hasn’t budged in what, 15+ years, and inflation certainly has changed the value in that time.  Not only that, but it is becoming very obvious that in much of the country the roadways are falling apart, and far beyond just a few potholes here and there.  I’d gladly pay an extra $1-$2 every tank of gas if I could be assured that all that money went straight into building and maintaining excellent roads.  No potholes, well lit, well marked, etc.  It more than makes up for the problems seeing in the dark, ruts, potholes, rough ride, road noise, etc.
    Of course the temptation to raid those funds is always too great.  Its actually a tax that seems to work, so well that they take the money and use it on other junk.
    But I’m tired of the poor quality road surfaces.  I’d gladly pay more to get them back to world-class. This might actually be one of the only taxes I could honestly say that I would support raising.
    Oh, and while at it, can we PLEASE ban studded snow tires?  I am amazed how quickly a fresh expressway in Spokane-Coeur d’Alene turns into a rutted, hydroplaning, extremely noisy mess within just a couple of winters.  Talk about flushing millions down the drain and then not having the money to fix the problems.  And I think it has been proven studs are not necessary from a safety standpoint any longer, at least certainly not enough to warrant all the damage they cause and additional road hazards due to poor water drainage and spooky jerks on the steering wheel (really bad when its snowing).

  • avatar

    If you think about it, no vehicle should have the right to use the roads for free.  And paying for the actual use is far and away the fairest means.  Kind of like when certain towns require the use of special bags for trash pickup where the cost of disposal is built into the cost of the bag.  It makes loads of sense as the folks who generate more waste pay more.  But as always the devil is in the details.  Knowing Mr Smith uses 12 bags a month is one thing.  Knowing that Mr Smith drives to X stores at Y at night and his travel patterns is something else entirely.  I shudder to think what some cash-strapped municipality might do with that information.  I can see it being sold to some slimebag marketing company.  I’d rather see the charge (no pun intended) being built into the electricity used to recharge the car.  A “smart charger” should have the ability to do that.  As for the vehicle being used in another state, doesn’t that same issue occur when an over the road trucker fills his tank in one state and drives clear through another one without stopping for fuel?

    • 0 avatar

      So public roads should be financed by user fees?
      How about public libraries? Should they lend books only to those who can afford a rental fee? If not, explain  how it’s any different. Both are public infrastructure, available to the entire public, and financed by public taxes.
      How about public parks? Available to all, or only to those with some spare change in their entertainment budget?

  • avatar

    Yes, we need higher (I would say significantly higher) gas taxes, and yes, there probably should be a usage-oriented way for EV drivers, too, to defray the cost of maintaining our infrastructure. But basically, states are looking around desperately for all these “user fees” because the social contract in this country has broken down.
    Instead of nickel and diming those who might not be able to afford it, how about a novel idea … graduated taxation that would actually take note of a person’s ability to pay. It could be called the “income” tax. And if the top tax levels were set at, say, those that pertained during the Eisenhower administration. we could do away with a lot of this other nonsense.

    • 0 avatar

      You are aware that the top 1% of income taxpayers pay roughly as much as the bottom 95% of income taxpayers pay, aren’t you? Info from IRS website and also National Taxpayers Union website.

    • 0 avatar

      If you want to put the top marginal tax rate to the 91% that was in effect during the 50’s you can also do away with a lot of “other nonsense” like JOBS.  The U.S. was the center of the universe for business and manufacturing then, so you pretty much had a captive audience with regard to taxpayers.  Try that today and the U.S. economy will be quickly devastated – at least what’s left of it.  We can’t get businesses to stay in this country with the current tax rates.  What do you think will happen when you raise them?

    • 0 avatar

      We never had 90%+ income taxes.
      What we really had was a large part of the economy under government command and scandalous tax rates were the hammer used to force compliance with it.
      Invest your profits in the politically favored shelter industry of the day and effective tax rates for the magnate class were lower in those pre-AMT days than they are now.
      Reflexive Envycrats should take note of the material standard of living before and after that command economy was dismantled.

  • avatar

    Never mind the Orwellian stuff.

    Per-mile taxing of EVs will only raise another barrier to buying them, so the only way liberal tree-hugging tax lovers will be able to motivate EV sales will be to mandate them.  And that is something the American consumer will never tolerate, given all the other drawbacks.

  • avatar

    i knew something like this is going to happen, but is having a real attitude reason it has to know where ever u go, if u’re paranoia about your privacy u going to go krazy when this became the law.
    IE such as passing thru some seedy area u forever be on the record, that really took all the fun out of life, say what if u wanna to drive by some questionable area just to show your out of town buddies how the street recreation does things.
    The gov has to replace the hefty road tax! This is one of it.
    bad thing is u need to start taking cabs if u go see mistress, go go dances etc.

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