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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 Suntan on 12/31/2008 1:53:19 PM , Rating: 2
Yeah, a GPS unit to track each and everyone’s actual distance, and a yearly submission process for everyone to some DMV for some kind of credit/or pay range to better even out the fact that some vehicles put more wear into the roads sounds like a much more simplified method than just upping the fuel tax…

The only thing I like less than politicians trying to justify increasing my taxes are politicians finding stupid, wasteful boondoggles as a means of justifying raising my taxes.


RE: Heavier vehicles...
By AnnihilatorX on 12/31/2008 3:23:16 PM , Rating: 2
Agreed with the sarcasm.
The method is over complicated. The fuel tax alone should be the most easy and logical way of taxing because the tax depends on both mileage and vehicle type.

RE: Heavier vehicles...
By Oregonian2 on 12/31/2008 9:50:03 PM , Rating: 2
Our Governor is determined to squeeze more money out of us no matter how much it costs or how inefficient it is.

I think he's just building trade stock to attempt imposing sales tax again (proposals have been repeatedly voted down -- only an blithering idiot would believe the revenue neutral effect promised each time (in the long run)).

RE: Heavier vehicles...
By JKflipflop98 on 1/1/2009 8:30:30 PM , Rating: 2
It's things like this that make me ashamed to say I live in this coo-coo state. It's like the people in charge here want to do good, but they come up with the most stupid ideas of how to get there.

The solar powered stoplight that will pay itself off in a modest 250 years or so? Brilliant!

RE: Heavier vehicles...
By Ammohunt on 1/2/2009 2:25:23 PM , Rating: 2
Not to mention the money Oregon will loose with this when anyone with any sense moves to the other 49 states. Michigan episode II?

RE: Heavier vehicles...
By BZDTemp on 1/1/2009 9:06:19 PM , Rating: 2
Also this means people are more inclined to think about gas millage. Of course there is a strong reflection of mileage in the weight of a vehicle but driving style also makes a lot of difference.

Still one thing a GPS system would let you do would be to charge more for say people driving at rush hour or perhaps in special environment protection zones. Also a system tracking all traffic would be great for the traffic reports and the development of road systems.

By mmcdonalataocdotgov on 1/5/2009 3:02:31 PM , Rating: 2
Just adjust the current tax rate for newer fleet mileage averages and have done with it.

RE: Heavier vehicles...
By murphyslabrat on 12/31/2008 4:25:09 PM , Rating: 2
I know, isn't this idea so brilliant? I mean, come on, isn't it so unfair that people are being taxed on exactly how much fuel they purchase? And wouldn't it be so much fairer to tax poor JB Hunt, when Mr. and Mrs. Smith get off with paying so little?

RE: Heavier vehicles...
By meepstone on 12/31/08, Rating: 0
RE: Heavier vehicles...
By Veerappan on 1/2/2009 12:12:04 PM , Rating: 3
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.

Read the article. 1.2 cents per mile or 24 cents per gallon. If you drive a vehicle that gets over 20 miles/gallon (mine does), your taxes will go up. By enacting this GPS tracking, vehicles that are very fuel efficient will have their taxes increased, whereas heavy/inefficient vehicles will have their taxes lowered.

It sounds like the exact opposite of what we should be encouraging with regards to consumer buying habits.

RE: Heavier vehicles...
By Moishe on 1/2/2009 2:42:45 PM , Rating: 2
This is what gets me...
quote: is increasingly important that the state find a new way, other than the gas tax, to finance our transportation system.

I understand exactly what he is saying, but I hate the idea that the vehicle environment changes and the government has to invent a new method to keep their same level of income.

This is just like the music industry trying to protect their revenue stream by force instead of by changing the business model.

How about simply NOT ripping off the tax payers for a change? Ohh... wait, this is the government we're talking about and ripping people off is just about all they do.

"People Don't Respect Confidentiality in This Industry" -- Sony Computer Entertainment of America President and CEO Jack Tretton
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