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A new mileage tax may replace the gas tax in Oregon. Oregon residents will be taxed by the number of miles travelled, as they travel along the state's highways like Highway 30 pictured here. Those not participating will face higher taxes at the pump.  (Source: Lyn Topinka)
A new ambitious high-tech effort to fairly distribute roadwork taxes proposed in Oregon, but can it overcome fears of government tracking?

Nobody likes to pay taxes, but they are reality of modern U.S. government as we know it.  However, if you have to pay taxes, you at least want them to be fair.  That's the mentality driving a rather revolutionary, albeit controversial, new plan in the state of Oregon.

In Oregon, as in other states, people have long complained about using fuel taxes to finance road work.  Such measures place a larger tax burden on those in professions requiring heavier vehicles.  So Oregon's Gov. Ted Kulongoski (D) has developed a new plan -- pay by mileage.

Oregon, whose highways recently gained attention via a new solar project, is now looking to legislate the governor's plan.  The new legislation will provide Oregon with "a path to transition away from the gas tax as the central funding source for transportation" via a mileage tax implemented with the help of GPS satellites.

While the exact details are still being ironed out, Gov. Kulongoski's web page gives the basics of the plan.  In it he states, "As Oregonians drive less and demand more fuel-efficient vehicles, it is increasingly important that the state find a new way, other than the gas tax, to finance our transportation system."

He is creating a task force "to partner with auto manufacturers to refine technology that would enable Oregonians to pay for the transportation system based on how many miles they drive."  Key studies were performed in 2006 and 2007 that indicate that such a program would indeed be possible. 

In the 2007 test which lasted 10 months with 300 motorists at two service stations, drivers were taxed 1.2 cents per mile and were refunded the 24 cents a gallon state gas tax.  When the motorists got to the pump, their vehicles connected to government computers informing them of the mileage (calculated via GPS tracking) and issuing tax.  Equipment for the test came from Oregon State University.

While clever, the program faces one enormous thorny obstacle -- concerns over the loss of privacy. 

The governor's online outline states, "The governor is committed to ensuring that rural Oregon is not adversely affected and that privacy concerns are addressed."

Despite assurances from James Whitty, the ODOT official in charge of the project, that the new GPS system would not be used for continuous tracking of citizens' cars, many advocacy groups are outraged and many remain fearful.  The final report on the 2007 test deployment was conscious of this fear, stating, "The concept requires no transmission of vehicle travel locations, either in real time or of travel history.  Accordingly, no travel location points are stored within the vehicle or transmitted elsewhere. Thus there can be no ‘tracking’ of vehicle movements."

Advocates point out that the devices are not developed by Oregon, but rather by industry partners.  The program's policy page states, "ODOT would have no involvement in developing the on-vehicle devices, installing them in vehicles, maintaining them or having any other access to them except, perhaps, in situations involving tampering or similar fee evasion activities."

However, even if privacy concerns can be laid to rest, there will also be a large price tag associated with initially implementing the program, one which may give residents sticker shock.  An initial investment of $20M USD would be needed, according to the governor, just to see if the program was viable.  A full deployment would require GPS be gradually added to gas stations and to all vehicles in the state.

The proposal also calls for a punitive tax against those not adopting the new device -- the gas tax will continue for vehicles not equipped to pay the mileage tax, but it will be increased 2 cents.



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RE: Heavier vehicles...
By ZmaxDP on 12/31/2008 1:14:17 PM , Rating: 2
It makes it unfair in a different way FITCamaro.

The weight/size of a vehicle does impact how much damage it causes a road and therefore how much maintenance money is needed to repair it. Also, the weight rating on a road will change the construction cost for new roads. To take the weight of a fully loaded Semi, you'll need a lot more sub-surface prep, higher grade compaction materials, more compaction materials, and a thicker road construction thus more asphalt/concrete or a combination of both. Also, the time and labor for a higher weight rated road are much higher as well.

So, while I agree that we shouldn't be taxed into driving priuses, we also shouldn't taxed into driving H2s either.

Unfortunately, I can't think of a good way to make a truly "fair" transportation tax. So I think we're going to be stuck with some kind of unfairness regardless. I prefer the current unfairness which at least encourages a better behavior than the one above.

(By better behavior, I mean economically. I'd much rather see our countries oil consumption continue to drop over the coming years so we can reduce our reliance and investments into certain hotspots. This is the same reason I'd like a plug in hybrid with a sufficient range to rarely use the ICE. It isn't about global warming or anything like that for me, it's just about reducing our dependence on other countries so we can avoid certain predicaments in the future.)


RE: Heavier vehicles...
By FITCamaro on 12/31/2008 1:33:30 PM , Rating: 3
I agree that I can't think of a truly fair way to do this. But hybrids are the epitome of unfairness in this matter. A plug in hybrid like the Volt might never use any gas (or very little at least). But its still going to be using the roads while paying no taxes towards supporting them. So if we went the way of hybrids, we'd have to start doing this since otherwise roads wouldn't be funded (or would drop dramatically).

So clearly the answer is to do away with hybrids. :)


RE: Heavier vehicles...
By MadMan007 on 12/31/2008 6:37:06 PM , Rating: 2
Clearly the answer is a tax that accounts for non-petroleum fuel consuming vehicles. Perhaps a registration fee that counts annual mileage, it could easily be tailored to each vehicle model's weight or other measure so that an electric compact doesn't pay as much as an electric SUV.

The problem is we are logical-thinking citizens and not wasteful politicians in office.


RE: Heavier vehicles...
By Veerappan on 1/2/2009 12:29:44 PM , Rating: 2
Agreed. Something that takes into account vehicle weight and miles driven is probably the fairest we can hope to come up with.

Something like:
Tax = X * Vehicle Weight * Miles Driven

Vehicle weight could be the weight from the manufacturer's spec sheet, and X is just some multiplier that gets changed depending on how much they feel like taxing us this year.


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