While this is not directly related to Ohio, some people in the ODOT Policy Thread have mentioned that drivers should pay taxes in the amount of how many miles they travel. To add to that, Oregon has released their Mileage Fee Concept and Road User Fee Pilot Program Final Report.

 

It can serve as a model for other states. As I stated in the ODOT policy thread, I support tolled Interstate Highways in rural areas using advanced transponder technology that would be regulated by the government, where one uniform system can be adopted. I am still up in the air regarding mileage fee concepts because that could have the unintended effect of reducing tourism and other long-distance travel, whereas a GPS-transponder deducting money by the mile is not as transparent as state and federal taxes that come out of the gasoline that you pump. I also feel that GPS-based technology can become a breach of privacy, which is all the more paramount lately.

 

Here are a few snippets.

 

Preface

Oregon’s adventure in developing the Oregon Mileage Fee Concept—the new revenue platform tested in the Road User Fee Pilot Program—began during the 2001 Oregon Legislative Assembly. Early in the legislative session, members of the Oregon House Transportation Committee received the visual treat of a parade of alternative fuel vehicles developed by automobile manufacturers. The legislators examined early versions of the hybrid electric vehicle as well as cars fueled by natural gas, bio-fuels and an assortment of other alternative fuels, including a fuel cell concept car.

 

As the legislators toyed with these cutting edge vehicles, a question nagged at them—what would happen to state road revenues if Oregonians started buying and driving these new vehicles in large numbers? Aware of Oregon’s heavy reliance on gasoline tax revenues, they intuitively knew the answer—Oregon’s road system would be in jeopardy as the gasoline tax revenues necessary to maintain, preserve and modernize the system slowly but steadily drained away.

 

Few in the nation had seriously begun tackling this looming revenue hemorrhage. So, these transportation policymakers did what Oregonians have done for over 150 years since they first found

themselves isolated at the end of the Oregon Trail. They proposed Oregon use self-reliance and imagination to find our own solution.

 

The Oregon Legislature drafted and passed a bill creating the Road User Fee Task Force, signed into law by Governor John Kitzhaber. The new law charged the task force with developing a new road revenue system alternative to the gas tax. The same legislation directed the Oregon Department of Transportation (ODOT) to administer the task force and run one or more pilot projects.

 

The mere name of the Road User Fee Task Force gives a clue as to the eventual outcome of its investigations into 28 different potential revenue sources. The central feature of the new system would be based on road use. While many tax and fee systems are built on a subsidy basis, meaning one set of fee or tax payers pay more so that another set of payers can pay less, the new system would directly connect to the burden each particular user places on the road system. Therefore, the amount paid would be a “fee for service” rather than a general tax unrelated to use.

 

The task force developed the Oregon Mileage Fee Concept to solve all major requirements for a new revenue system, including adherence to good tax policies. The Oregon Concept proposes to employ existing technology in a new way and institute critical administrative processes that allow for a fully functioning system seamlessly integrated with gasoline tax collections. As designed, the new system should be affordable to implement statewide, enforceable and provide system redundancy in the event of technology glitches. Finally, and most importantly, the new mileage charging system will be easy on the motorist, who does only one new thing—the motorist pays a new charge in the same old way.

 

While principally designed to replace the gas tax over time, the Oregon Mileage Fee Concept also provides an electronic platform for creative applications of congestion pricing to manage levels of traffic during peak periods of driving. In other words, the concept accommodates creation of multiple “zones” that allow not only local option but also various pricing methodologies. The pilot program successfully tested “area pricing” but this conceptual system could expand to allow a virtually unlimited number of congestion pricing applications, not only area pricing but also cordon pricing, distance or point tolling of individual facilities and time-of-day pricing of onramps to limited access highways, or combinations—most without roadside infrastructure. Indeed, congestion pricing strategies could be tailored in ways that fit the individual natures of urban communities. These strategies could be phased in over time as congestion management needs surface.

 

The recently concluded Road User Fee Pilot Program is the first field test of the Oregon Mileage Fee Concept. While oriented to prove the concept, it must be noted that this field test necessarily sacrificed certain elements of the Oregon Concept as a matter of practical necessity. Since the field test was of temporary and limited duration, the on-vehicle devices could not be manufactured into the vehicles. Nor could the volunteer motorists’ vehicles be permanently changed in any way. Furthermore, alteration of the software of existing fueling stations’ point-of-sale systems was not permissible under current legal or contractual authority.

 

As a result of these practical constraints, the field test retrofitted temporary, prototype on-vehicle devices into vehicles privately owned by volunteer participants, employed lab-generated data

transmission technology and jury-rigged modifications to existing fueling station systems. Problems occur under such circumstances but the overwhelming bulk of the difficulties were associated with these temporary measures. The remaining difficulties are associated with technologies for which further refinements are achievable or more effective alternatives are readily available.

 

The technological theory behind the Oregon Mileage Fee Concept remains sound. Most importantly, the necessary critical administrative elements of the concept—tedious though they may be—worked like clockwork. The Oregon Department of Transportation concludes that the Oregon Road User Fee Pilot Program tested the critical elements of the Oregon Mileage Fee Concept and yielded the result—Concept Proven.

 

James Whitty, Salem, Oregon, November 2007

 

KEY FINDINGS

 

The concept is viable

The pilot program showed that, using existing technology in new ways, a mileage fee could be implemented to replace the gas tax as the principal revenue source for road funding. At the conclusion of the pilot program, 91 percent of pilot program participants said that they would agree to continue paying the mileage fee in lieu of the gas tax if the program were extended statewide.

 

Paying at the pump works

The pilot program showed that the mileage fee could be paid at the pump, with minimal difference in process or administration for motorists, compared to how they pay the gas tax. Like the gas tax, collection of the mileage fee can be embedded within routine commercial transactions, with the bulk of it pre-paid by the distributor in the form of the gas tax. By including the mileage fee in the fuel bill, cash or credit payments are accommodated, just like the gas tax. Although many of the prototype components used in the pilot program did not, by definition, meet the standards

of commercial products, the next stage of technology development would take the technology to commercial viability.

 

The mileage fee can be phased in

The study showed that the mileage fee could be phased in gradually alongside the gas tax, allowing non-equipped vehicles to continue paying the gas tax, while equipped vehicles could pay the

mileage fee. Retrofitting vehicles with mileage-calculating equipment appears expensive and difficult.

 

Integration with current systems can be achieved

The study demonstrated the ability to integrate with two main existing systems: the service station point-of-sale (POS) system and the current system of gas tax collection by the state.

 

Congestion and other pricing options are viable

The study showed that different pricing zones could be established electronically and the assigned fees could be charged for driving in each zone, even at particular times of day. This proves the mileage fee concept could support not only congestion pricing but also assessment and collection of local revenues and other “zone-oriented” features. Furthermore, the area pricing strategy applied in the pilot program produced a 22 percent decline in driving during peak periods.

I think the whole transponder system woule overcomplify things (and add unneeded costs).  Why not just

 

1) Set a funding target for ODOT.  The current level would probably be logical.

 

2) Index that level to the applicable indices (construction price index?) so that future increases in materials and labor won't cut into the budget.

 

3) Have a 3rd party accounting group do an audit every year to determine the necessary gas tax adjustment to make up for the shortfall/surplus.  Call it a gas tax true-up.

 

No need for fancy transponders.  If everyone switches over to more efficient cars and gas tax revenues dip by a couple of percent one year, the true-up will catch it the next year by adjusting.

They'll put a transponder in my car over my dead body!  Stick with a gas tax, or a carbon tax.  It will do essentially the same thing, without the breach of privacy.  Even better, it penalizes those with heavier vehicles, which generally use more gas.

^yeah i 100% agree, no need for individual tracking devices on your car. thats nanny state nutty. just tax at the source.

 

although come to think of it that idea would be easy to incorporate within e-z-pass regions. thats probabally what they would do in chi/ny when they get around to it. e-z-pass records have already been used to convict people of crimes, so they are already tracking us.