By on May 21, 2015

Oregon Welcome Sign Circa October 2010

This July, Oregon will be the first to implement a program taxing motorists by miles driven instead of collecting at the pump.

Up to 5,000 cars and light-duty commercial vehicles can volunteer for the program — dubbed OReGO — each of whom will then be charged 1.5 cents per mile, USA Today reports. The information will be tracked via a device provided by the Oregon Department of Transportation/Sanef, Verizon Telematics, or Azuga, depending on the circumstances and needs of each volunteer.

Those whose vehicles fuel up at the pump will receive a tax credit if fuel use exceeds miles driven, while EV owners will pay the road-use tax without receiving the fuel tax credit. OReGO has a quota in place for less-efficient vehicles, limiting acceptance to 1,500 volunteers whose vehicles get less than 17 mpg, and 1,500 for those with vehicles between 17 mpg and 22 mpg.

The ultimate goal of programs like ODOT’s OReGO is to make up in infrastructure maintenance and repair funding what is being lost by continuously low fuel taxes and improving fleet fuel economy. Gas taxes provide Oregon with under half of the state’s highway fund, the rest coming from the Highway Trust Fund.

The $8.4-million program has no expiration date at this time, with permanence left in the hands of the Oregon legislature. Concerns over privacy and an alleged favoring of conventional vehicles over EVs and hybrids regarding tax credits have come up, the former remedied through data protections such as offering devices without GPS, and record destruction after 30 days with limits on the data’s use for devices with GPS. Volunteers can also opt-out of the program at any time, and can receive refunds for miles driven on private property and outside Oregon.

OReGO’s first day of implementation is July 1.

[Photo credit: Oregon Department of Transportation/Flickr/CC BY 2.0]

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73 Comments on “Oregon First In Nation To Implement Per-Mile Road Tax Program...”


  • avatar
    TW5

    If the people in Oregon are going to pay directly for their road use, they deserve private roads. Governments will always transfer the money to other programs and then raise taxes. Federal government has the same problem.

    It’s pathetic. Private companies understand that the roads generate revenue. Government views roads as an unnecessary expense. They transfer money away from the programs that generate more money, and they bury public funds in programs that self-perpetuate and overrun their budget estimates.

    • 0 avatar
      Hummer

      I don’t disagree but what’s the likelihood the road use taxes will be removed if all non-military roads were sold to private companies? The names of the taxes will be changed to something else and we’ll be paying twice.

      • 0 avatar
        TW5

        I understand the argument, but the theory of racketeering says that conspiring to harm the public has an inverse relationship with the number of people who must collude to make the conspiracy work.

        If you double the number of people who conspire, in theory, the conspiracy will more easily collapse.

    • 0 avatar
      mikedt

      You must know different companies than I do.

      Think of the Comcast model for example. Company XYZ buys the interstate that runs straight through the state and gets a lot of traffic. After they buy it and put up toll booths, what’s their incentive to keep it in tip-top shape? You can’t vote them out of office, you can’t fire them, nobody is going to build an interstate along side the current one, and your only other route mean getting off the interstate and traveling back roads and putting up with congestion and traffic signals.

      Kind of like how for 90% of the country it’s Comcast or dial up. That’s the model private roads would lead to.

      • 0 avatar
        Russycle

        Comcast was the first thing to come to my mind too. Nice racket to be in:
        http://www.freepress.net/blog/2009/11/24

      • 0 avatar
        TW5

        When I mention private roads, I mean privately owned. Corporate governance of roads is not practiced anywhere. Private road companies want imminent domain privilege, but they don’t want the cost and complexity of enforcing safety regulations. Governments don’t want to give up control of transportation infrastructure.

        The real danger in the private road business is that corporations will cut a deal with the government to make impoverishment of the people an irresistible proposition. How is that any different than what we have now?

      • 0 avatar
        cartunez

        Please don’t ever use cable companies and telcos as an example of how the free market works. Cable companies suck because they are in bed with local government(s) that gave them monopoly access so they don’t have competition.

    • 0 avatar
      raph

      Sounds good in theory if you believe your typical big company has your best interest at heart. Anybody from Chicago can tell you how well privatizing a public road works.

      Roads would become commodities with preferred routes no doubt commanding higher tolls.

      In the case of Chicago and it’s private road adjacent roads had their speed limits unnecessarily lowered to make the toll road more attractive.

      Also the issue of companies competing for desirable chunks of road and protecting that asset ( can’t think of the bridge name but IIRC it was proposed for Detroit and became a huge boondoggle as it was going to be privately owned with a toll – its an interesting read if anybody can remember it? )

      I don’t mind tolls to help fund the infrastructure but I’ll pass on a bunch of for profit goons owning the national highway system

      • 0 avatar
        tonycd

        “Anybody from Chicago can tell you how well privatizing a public road works.”

        Yep. I am, and it doesn’t.

        Worse yet was when they privatized the parking spaces by selling the meter operation to a company half-owned by Goldman Sachs (believe it). The cost of parking spaces nearly doubled. Then the company decided they were getting ripped off because they couldn’t collect parking fees when the streets were closed down for a few hours for the Chicago Marathon, so they sued the city to “recover” even more.

        • 0 avatar
          thornmark

          You forgot to mention why Chicago “privatized” roads. It wasn’t because “they” believed in privatization, it was because one party government had looted the city. It was all about one shot revenue injections.

          Chicago and Cook county also have a 3% sales tax on top off the state rate, combining for 9.25%. The Chicago machine – “they” -have left the city and by extension the state w/ liabilities so great that IL is really in the worst financial shape of any state in the country.

          As of last week, Chicago’s bonds are rated “junk” by Moody’s, which refuses to use financial assumptions made by those known as “they”. You know, the ones who sold the roads, lots and meters.

      • 0 avatar
        Landcrusher

        That sort of scheme already exists with public toll roads.

        Still, I agree with you since the usual result of mixing up what ought and ought not be done by businesses is generally a bad idea. Roads should be public unless owned by the people whose property they are on.

      • 0 avatar
        stuki

        Neither Big Companies nor Big Governments ever have nor will give one iota about you nor anyone else beside themselves. Praying, pretending and being suckered into believing, there exist some magic unicorn of an organization out there that somehow differ in that respect, is one of the defining fallacies of the past few centuries. The Iranian Mullah chanting “Death to America” and the flag waving politician denouncing “terrorism” on Fox News, cares about Americans to exactly, 100.000%, the same degree: Not at all. Deciding who to entrust with important decisions based on the notion that someone ostensibly “cares” more or less about you than someone else, will never lead to anything but misguided hopes and childishly silly choices.

        Instead, the focus should be on whom can most easily be tossed aside at the slightest hint of misstep. Which is almost always the smallest possible entity. Not one big Comcast, nor one big Government. But, say, one small company, local government, family or church group for every mile; contract renewable (or not, if for some, any, reason, they aren’t too impressive) every 3 months or so…. Only the near certainty that the slightest misstep will leave them and their families starving in the streets, will restrain the otherwise 100% self centered individuals/organizations from bending you over and raping you. That’s just reality. Nothing else really is, no matter how it’s sold on TV and in public schools.

    • 0 avatar
      ttacgreg

      “Governments will always transfer the money to other programs ”

      False statement.

    • 0 avatar
      jim brewer

      Toll roads cost approximately twice as much per mile driven as government roads. Anyway, you may get your wish.

      Privatizing the roads under these circumstances is basically a stroke of the pen. I suspect that is the point.

  • avatar
    Hummer

    So the fuel that these test subjects use will be completely tax free? Other than federal taxes I assume, this program could be a game changer if the (minus fed taxes) true cost of fuel is used.

    • 0 avatar
      raph

      I know environmentalists oppose the measure as it taxes electrics, hybrids, and fuel burning vehicles at the same rate rather than convincing peoplease into more effciency vehicles.

      Their solution would be to increase the gas tax both for inflation and as more people switch to more effciency modes of transportation.

  • avatar
    SCE to AUX

    Although it has its faults, this is generally the way things need to go, in order to solve the problem of funding infrastructure with rising CAFE numbers.

    Their payment scheme seems complicated, and the telematics will be a constant source of angst. But still, a per-mile charge starts to address the issue of road usage.

    I believe they could charge annually via registration renewal or vehicle inspection, to get the mileage. Then,

    Fee = miles driven X GVWR X rate

    This way, you charge more for road wear due to miles and vehicle weight, and nobody can complain about special privileges for EVs, etc.

    • 0 avatar
      Hummer

      Also have to add in tire width, something heavy on narrow tires is much more damaging than tires that distributes the weight over a larger area.

      • 0 avatar
        ttacgreg

        I am not nerdy enough know for sure, but I bet the pounds per square inch of tire tread is way way higher on a loaded semi than any other vehicle type. Furthermore out west here the nature of the wear and tear on the steeper grades indicate to me that the heavy vehicles are applying shear stress to the asphalt powering up hill, and braking (geared down, hopefully) down hill, and (particularly in hot weather) the plasticity of the asphalt causes it to deform. East bound out of Vail on I-70 needs a resurface every other year. One must note this is also trafficked by chained up trucks clawing at the pavement through snow pack 5 months a year.
        I am guessing tire width on a given light vehicle is an insignificant factor..

        • 0 avatar
          319583076

          ttacgreg is right – highways, bridges, and similar structures are designed with standard axle loads representative of the largest permissible axle load expected during the service life of the structure, the actual wheel loads on decks are only considered for certain cases. I can’t say for sure what is or is not considered for fatigue or wear on these structures and decks.

          For interested parties – railroad bridges and supporting structures are designed explicitly for tractive and braking forces to account for the sort of things ttacgreg observed on the asphalt grades in Colorado. I’m not 100% sure, but I don’t think highway traffic structures account for tractive and braking forces. At least not in the design of members for strength, these things may be considered for what is known as serviceability.

    • 0 avatar

      I don’t see why they can’t simply alter the level of the tax every year to make up either for over- or under-funding.

      That will also continue to encourage people to purchase more fuel efficient vehicles.

      • 0 avatar
        Russycle

        Yeah, talk about a solution in search of a problem. But even in Oregon, raising taxes is political suicide, so we get “creative” new ways to raise revenue.

    • 0 avatar
      TW5

      The point of socializing road funding and road governance is to overcome the limitations of the private sector, which includes a propensity to charge for marginal usage, though marginal costs are relatively low.

      Changing the tax laws to mimic use-fees is self-defeating and utterly pointless, unless you’re trying to alleviate congestion (tragedy of the commons). Furthermore, Oregonians will be double taxed for their interstate travel.

  • avatar
    heliotropic

    “Those whose vehicles fuel up at the pump will receive a tax credit if fuel use exceeds miles driven”

    The way this reads is that vehicles that use more fuel will qualify for the credit sooner, which seems backwards, since they are most likely heavier and causing more damage to the roadways.

    • 0 avatar
      Hummer

      A few thousand pounds on a single axle isn’t the problem, the tractor trailers that have 8k+ pounds on a single axle are causing much more damage than any personal passenger vehicles. And seeing how it’s impossible to even buy a new consumer grade vehicle (aside from maybe 3/4+ trucks which are justified) that has low MPG, I don’t think we need to worry about the exception. At this point I’m pretty sure no one is paying, once the details have been sorted and the final system implemented, I’m sure few to none will be paid to drive.

      Of course one could say I’m biased…

      • 0 avatar
        heliotropic

        I don’t think anyone will be paid to drive, From the FAQ how its supposed to work is that Oregon will still charge tax on fuel, but that money paid for fuel tax will chip away at the net total of the mileage fee. Using the calculator on their site, the break even point is 20MPG, if you get worse mileage than that you’ll end up paying more gas tax and your mileage fee will be completely refunded, if you get better MPG than that you’ll have to owe a some on the mileage fee (up to the full amount if you have an EV).

        Like you said I agree a pickup isn’t doing much more damage to a roadway vs a sedan or compact, but the way this program seems to work seems to consider the more efficient the worse off it is for the roads. Especially since larger vehicles are excluded altogether:

        “The current Road Usage Charge Program addresses only motor vehicles with a gross vehicle weight rating of 10,000 pounds or less. “

    • 0 avatar
      319583076

      Fantastic Planet is one of my all-time favorite albums. I think I’ll listen to it now!

  • avatar
    maxxcool7421

    To clear things up ( I live in eugene oregon).

    there will still be a road tax and you will still pay full-boat at the pump. but based on the amount you drive you may or may not get a ”refund”…

    it is a voluntary TEST at this time for 5000 participants

    if you drive a car that gets 19mg on avg like me … you get paid to drive.

    you will have to plug in a odb2 dongle.. as to how it collects data I do not know.

  • avatar
    Car-los

    The government wants to put a device to track down what you do and where you go? Great. We really need that.

    It all starts with a very mild “non intrusive” plan for volunteers but once the legislation is in place and people get used to it the amendments start…and big brother is here to stay…

    • 0 avatar
      319583076

      Me too. Why would I consent to being tracked and audited by government agencies? I hope none of you believe that foolishness about destroying the data and limiting data use, either.

    • 0 avatar
      Marone

      I’m personally not paranoid about this. I just don’t feel I have any secrets and honestly wouldn’t care. Maybe I missed something, but from what I read they are simply tracking mileage and this is a TEST, with volunteers. I’ll wait and see how the program develops.

    • 0 avatar
      energetik9

      How is a device like this different than devices used by insurance companies?

      I’m in the military. Between secruity clearances and other aspects of my service, the government already knows all about me. This seems like a minor step that I would gladly take if it saved me money. I wouldn’t have any paranoia over this. I just don’t beleive that a state has any interest on where I drive my car.

    • 0 avatar
      ttacgreg

      Okay, I know it is optional, but there already is a device that tracks you, and lots of people are optiong for it. That would be your smartphone.

    • 0 avatar
      ttacgreg

      This may just be me, but I think big $$ private (so called”free market”) entities tracking me is at least as, or more potentially sinister than the government doing the same.

    • 0 avatar
      28-Cars-Later

      They are turning the nation into a prison.

    • 0 avatar
      cwallace

      That’s what I don’t get, either. The state looks at my car every year as part of the inspection process. Check my miles driven then by looking at the odometer. They trust the inspector to do the smog test correctly, so they should be able to trust the odometer reading too.

      (If some state doesn’t do an annual safety inspection (!), then make it part of the tagging process or something.)

      Either way, there are plenty of less-intrusive ways to figure out how much somebody drives each year than to actually physically track where they logged those miles.

  • avatar
    ravenchris

    So, in all this fairness will childless couples begin to get refunds on their property taxes?

  • avatar
    PandaBear

    The property pricing between good/bad school district has taken care of that.

    • 0 avatar
      redav

      I can’t speak for OR, but in my area, the highest property values are in places that aren’t kid-friendly. If you have kids and want to be in a good school district, then you have to accept buying a larger house for less cash and paying less taxes.

  • avatar
    SunnyvaleCA

    Here in California the government seems to like giving tax breaks to people who _don’t_ use gasoline. In Oregon it seems the government is reducing taxes (i.e.: penalties) on people who consume the most gasoline (per mile driven). The net effect is only that huge amounts of additional regulation as been created.

    There is one way that per-mile driving taxes could be good: congestion charging. Charge different per-mile rates depending on local road congestion. That way we could make much better use of the road system. Of course the poor people will hate this scheme and the people worried about intrusive government tracking will hate it too.

  • avatar
    Master Baiter

    Sounds like a scheme to justify hiring more state beauacrats to manage increasingly complex tax regimes.

  • avatar
    Rich Fitzwell

    It’s real simple, we’re broke.

  • avatar
    pdl2dmtl

    Sadly, this makes me laugh. US is really that broke?

    What will happen if someone comes up with a car that levitates, a la Star Wars? You do not touch the road, hence no tear and wear…. Tatooine did not have any roads, if I remember correctly.
    How will they tax then?

  • avatar
    Big Al From 'Murica

    I shudder to bring it up, but roads are like schools…we benefit from good roads even if we never drive on them. Why not fund them similar to how we fund schools.

    • 0 avatar
      redav

      I personally feel that a simple, broad, and diverse methods of taxation are best, much like diversifying your portfolio.

      A small, simple fuel tax, plus a small, simple tire or other consumable tax, plus a small, simple annual licensing fee (could be based partly on gross weight), and if necessary, they can even check the odometer when you renew and use a small, simple tax on total miles driven. Of course the total tax owed needs to stay at reasonable levels, so if a new tax is added, then others should be scaled back. By using many different types taxes, it’s less likely that anyone (like EV drivers) would simply avoid paying a fair share.

      But this plan of installing dongles, figuring out which tax is higher, issuing rebates, is too complex and just plain silly.

  • avatar
    kosmo

    Interesting arguments on both sides of the issue, above, but here is my point:

    8.2 MILLION DOLLARS FOR THIS TEST?!

    As an Oregon taxpayer, I say no.

  • avatar
    ixim

    Raise the gas tax as much as necessary. Yeah, too much will be diverted to mass transit. So what? Beats having some corporate entity profit from our public roads.

    • 0 avatar
      28-Cars-Later

      So instead of funneling “entity profit” into corrupt private corporations we funnel it into corrupt public authorities and into the pockets of welfare recipients?

      Think harder.

      • 0 avatar
        redav

        If the concern is corruption, no method of taxation will address that. Instead, you have to address the corruption. A criticism of a tax method based on expectation of corruption is not a reasonable argument.

        • 0 avatar
          Landcrusher

          Not sure your point here, Redav.

          1. Certainly different types of taxation vary in ease of corruption and tendency to be corrupted.

          2. All taxes lead to corruption possibility by nature because money is collected.

          If you are trying to make the point that 2 negates 1 you won’t get there logically.

        • 0 avatar
          28-Cars-Later

          Precisely, redav but both sides of the coin are corrupt in this case. Booo corporations are X lets fund public transit. Booo public transit is X lets funnel tax dollars to private corps. The best way to go is to root out corruption.

      • 0 avatar
        ixim

        Well, welfare recipients are people, just like corporations, no? Either way, there will be some corruption, private or public. At least the government answers to us, sometimes.

  • avatar
    stevelovescars

    My frustration upon reading this is that there just seems to be a complete lack of any long-term vision or strategy.

    Is our goal to reduce consumption of oil and reduce air pollution? If so, then higher gas taxes should encourage people to buy more fuel-efficient and/or cleaner cars or commercial vehicles. If higher CAFE regulations mean less gas use, then just raise the gas taxes more to compensate.

    Is our goal to tax based on miles driven to increase state revenue while creating a disincentive (or at lease offsetting the current incentives) for using less fuel? If so, then do what Oregon is doing.

    To me, the head-swiveling back and forth seemingly knee-jerk policies are idiotic and lack any kind of logic.

    If I were a business owner with a fleet of trucks, I’d now be incentivized to buy vehicles with the lowest up-front costs which are likely also heavier users of fuel with older technology. This is just an insane lack of leadership by the state legislators too afraid to do their jobs.

    • 0 avatar
      28-Cars-Later

      I agree with you but seldom has gov’t ever had long term vision or effective strategy.

      “Is our goal to reduce consumption of oil and reduce air pollution?”

      The problem with this line of thinking is simple, oil powers modern civilization. Period. There is only so much to reduce before you’re back to the 19th Century. Even if consumption is reduced by 10% over a ten year period (which is a huge amount of oil) 90% of the original figure is still being utilized. You can only reduce consumption to a certain percentage before society as we know it ceases to be. Without a paradigm shift away from oil to something else, “reducing consumption” simply becomes another form of control.

      Air pollution is another fallacy. Yes at one time the amount of certain elements in the air was X per cubed mile (or however the figures were expressed). The paradigm shift was the catalytic converter which allowed for significant reduction in tailpipe pollution with at least one drawback cited below. However until the ICE itself is completely replaced in a paradigm shift, the best way to control localized air pollution is to limit the driving population in any given area. I personally think ICE emissions have gone about as far as they are going to go, although without figures it would be difficult to back up such an assessment. For instance per Wikipedia states a SULEV is 90% cleaner than the average new model year car, but doesn’t quantify what that model year is (LEV?). If SULEV is 90% better than LEV, and PZEV is better than SULEV, then once everything reaches PZEV (or CNG in AT PZEV) that’s the best you’re gonna get from an ICE motor as after that its EV, hydrogen etc. But don’t expect them to drop the emissions worship because just like fuel consumption, its another way gov’t won’t relinquish control.

      “An engine equipped with a three-way catalyst must run at the stoichiometric point, which means more fuel is consumed than in a lean-burn engine. This means approximately 10% more CO2 emissions from the vehicle”

      http://en.wikipedia.org/wiki/Catalytic_converter

      http://chemwiki.ucdavis.edu/Physical_Chemistry/Kinetics/Case_Studies%3A_Kinetics/Catalytic_Converters

      “LEV (low-emission vehicle)
      The minimum standard for all new cars sold in California as of 2004.
      ULEV (ultra-low-emission vehicle)
      SULEV (super-ultra-low-emission vehicle)
      SULEV emissions are 90% cleaner than the average new model year car.
      PZEV (partial-zero-emission vehicle)
      A PZEV meets SULEV tailpipe emission standards, but has no evaporative emissions (i.e., no unburned fuel leaves the fuel system). A PZEV has a 15-year / 150,000-mile warranty on its emission control components.”

      http://en.wikipedia.org/wiki/Ultra-low_emission_vehicle

      • 0 avatar
        stevelovescars

        Perhaps I should have been more specific about CO2 emissions? These are still a function of fuel consumption with all else equal, no?

        One could certainly argue that we’ll never reduce oil consumption to zero and that passenger cars are not the main cause of green house gas emissions (cow fart arguments again)… but our government(s) DO have a number of regulations in place to push for greater fuel economy and lower emissions.

        One could also argue that some of these efforts have gone beyond the point of diminishing returns. However, my point was that policies like these in Oregon actually appear to contradict many of these other programs.

        I personally believe reducing demand for gas by consumers will go a lot farther than pushing for expensive new technologies. Higher gas prices, subsidies for cleaner (newer and more expensive) technologies, and changes in fashion (being “cool” to drive a Prius in L.A. as opposed to a Hummer H2) will pull people into fuel-efficient cars faster and more effectively than trying to force them to buy more expensive technology they don’t care about. The EV mandates in CA in the 1990s were a good example of the latter… they forced OEMs to “sell” zero-emissions cars but did nothing to help create demand for them. Gas was $1.25/gallon and the state couldn’t even allow EV drivers to use HOV lanes… that came much later when hybrids hit the market.

        • 0 avatar
          28-Cars-Later

          Regarding emissions I think its becomes a zero sum game (or near zero sum game) once every ICE vehicle meets PZEV compliance. The only thing to improve the air pollution situation caused my motorists afterward would be a paradigm shift to a new kind of ZEV technology in my view.

          I agree with the rest of your post simply because improving efficiency of a non-renewable resource is certainly beneficial but I disagree on the methodology. Gov’t is too involved in the process and exerts too much control which becomes inefficient to the end goal. Regulations forced many automakers into small turbo engines which cost more to manufacture, burn more fuel in real world use, and are not well suited for the heavy vehicles they move around. A cylinder deactivation technology on a cheaper, larger, motor could yield the same results if not return better efficiency depending on how it is driven and what the weight of the vehicle happens to be vs torque rating. Taxation is another issue, already 1/6 of fuel taxation is spent on non-road items and pork. Reduce this figure and you give road maintenance as-is an effective funding increase. Taxing to control behavior while effective has macro economic consequences with fuel which it does not have with cigarettes or alcohol (because cheap energy powers real economic growth). Ronald Reagan was a bit of a senile tool at times but he was right in saying: government is not the solution to our problem; government is the problem.

  • avatar
    cartunez

    If they would stop raiding the road funds and cut the waste and out right fraud they would have plenty of money to keep the roads up. America has turned into the worst kind of junkie. So focused on who is having sex with who and things that really matter get no attention at all.

  • avatar
    bud777

    You have to understand what is happening in Oregon. An out of control Public Employee retirement System (PERS)has gutted most programs. We are 49th in education, our roads are worse than Detroit and there is a constant struggle to cut more to guarantee that public employees retire at more than 100% of their salary plus free health care. This tax will not replace fuel taxes, it will add to them. The are willing to penalize efficient autos to pad their coffers. In Oregon green means money for the state, not eco-responsibility.

    Good thing that all my cars are pre 1996

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