Dump the gas tax — instead pay by the mile
Better mileage means less gas tax to build roads. California and others are checking out a new approach that Oregon’s been piloting.
States’ gas tax revenue is slumping. California and other states are looking to an innovative approach pioneered by Oregon: pay by the mile.
The gas tax you pay at the pump isn’t cutting it anymore. Does a new approach being piloted in Oregon offer a solution?
Volunteers in the OReGO program plug a dongle into their dashboard that tracks their mileage.
About a hundred years ago, Oregon became the first state to start paying for highways by taxing gasoline. Pretty much everybody soon followed suit. But as cars have gotten more fuel efficient – and as plug-in vehicles have gained popularity – gas tax revenue has slumped.
For example, when I gas up my fuel-efficient Dodge Neon, the 31 cents per gallon I pay the state in gas tax doesn’t amount to much, usually less than three bucks. That’s great for me, but not so great for Oregon’s transportation budget.
So, last year, Oregon was the first state to try out a new idea, where Oregonians pay for the miles they drive instead of the gallons they buy at the pump.
Tom Fuller, with the Oregon Department of Transportation, explained that the pay-by-the-mile pilot program – called OReGO – has about a thousand volunteer drivers. They plug a small device into their cars’ dashboard that tracks their mileage, then charges them a cent and a half per mile. Fuller said a pay-by-the-mile system is the fairest way to raise money for roads.
“So somebody who drives an electric car, they pay no gas tax whatsoever, but yet they still use the roads, just like somebody who drives a gas guzzler,” he said. “So there needed to be a way of evening that out so that the people who use the system pay for the system.”
OReGO volunteer Evan Burroughs said he pays a little more tax than he would with the gas tax at the pump.
“I pay a dollar a month, $2 a month, something like that,” he said. “Very, very minimal.”
A screenshot of the Azuga smartphone app, from one of the two companies that manage the data for OReGO drivers.
The device that tracks mileage can give you data on acceleration, braking and other aspects of your driving habits that affect fuel efficiency. It’s kind of like having a Fitbit for your car. Burroughs admitted to being a bit of a data geek, and said he enjoys tracking that feedback.
Other drivers however are uncomfortable with the “Big Brother” overtones of mileage tracking. The idea that the government knows how much you’re driving – or even where, if you opt into the GPS-based system – creeps them out.
But both of the companies that handle OReGO’s data collection say while they send mileage data to the state to calculate the tax owed, your personal information is protected by state law.
A task force will make recommendations to the Oregon legislature in the fall. Some sort of mandatory system is likely to emerge from next year’s legislative session. But a lot of political arm twisting may be needed to get trucking firms, agriculture and other heavily fuel-dependent commercial players on board.
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