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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: Fail.
By gstrickler on 12/31/2008 5:37:02 PM , Rating: 2
Ironically, a lot of cars already have GPS built in with much more sophisticated capabilities than this that are completely exposed to the private corporations that make the vehicles (on-star anyone?). No one has really raised the conspiracy flag about that.

I'm more concerned about a private company knowing my whereabouts at all time than I am about the government. If they get an idea to abuse the information a private company is far more likely to be competent at doing so...

Agreed, in theory. However, OnStar and other standard GPS units use GPS only to determine the current location of the vehicle, they don't continually store or transmit the location of the vehicle. With OnStar, when you're in a crash, the system uses a built-in cell phone/modem to call the OnStar computer and then report your current location (and not where you have been).

Some of the units designed for off-road use do have a form of tracking that the user can enable/disable for the purpose of leaving a trail of "virtual bread crumbs" from the point at which you left the known road(s) so you can follow that trail back to the road. Again, that feature is limited to certain units, the information is kept internally only, is deleted at some point, and can be disabled entirely by the user.

Charging by the mile is certainly a worse system than the admittedly imperfect per gallon system we use now. Weight x mileage might be better in theory, but it would be much more expensive to track the mileage. Weight x mileage has other flaws because a heavy vehicle is causing more wear than a lighter one, even when sitting still (e.g. parked, at a stop light/sign, idling in traffic, etc.) and each time you start or stop (e.g. at a traffic signal) you cause additional wear). Also, a vehicle that traverses a lot of bridges is "costing" more than one that uses primarily surface streets. Mileage without a lot of additiona info isn't a particularly good metric.

I used to drive a lot of miles, but they were almost all highway miles. Now I drive about 70% less distance, but the time is only reduced by about 30% because it's now almost all surface streets (with lots more traffic signals). My average fuel economy dropped about 15%, so I'm paying about 15% more per mile than I used to, which helps balance out all the extra wear due to traffic signals.

Per gallon is imperfect, but I can't think of a better system (one that's more accurate/fair, low cost to administer, maintains privacy, etc.)

Electric vehicles (and to a lesser degree hybrids) do alter the equation as they use no (or less gas), so they're not paying (as much). However, those are still such a small percentage of vehicles that it's not worth changing the current system yet. Someone could make a good case for not taxing those vehicles (as much) at this time as they're helping reduce our dependence on oil imports.

Overall, a good post.

RE: Fail.
By Fritzr on 1/2/2009 12:27:48 AM , Rating: 2
One of the "features" OnStar does NOT advertise is that they can activate the system remotely. In short OnStar can by by pressing a button get a location reading for any OnStar equipped car. They can also turn on the in car microphone and record "ambient noise". This is how they can pre-emptively contact you if they suspect you need help. The police can (and have) require OnStar to activate the mic and record the occupants ... search warrant required unless of course the FBI presents a National Security Letter or other accepted waiver of the constitution.

For your current location all that is required is a police officer stating that they are tracking a suspect and would the OnStar operator kindly look up the suspect's current location.

The Oregon proposal sounds like it offers a lot more protection of privacy than OnStar equipped cars currently offer. BTW unless you cut the power to the OnStar hardware, you can be sure that OnStar can activate nonsubscribers when asked to do so ... Welcome to a Brave New World :D

"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis
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