Oregon just debuted this radical alternative to the gasoline tax
As Congress continues to wrangle over solutions to the nation’s ongoing highway funding issues, the Oregon Department of Transportation is rolling out a fairly radical alternative.
The federal Highway Trust Fund has been destabilized, primarily, by declining revenues from the gasoline tax—a continuing trend caused by inflation, pricier construction materials, and rising fuel efficiency. So instead, Oregon is implementing a per-mile road usage charge that’s the same for a panel van as for a hybrid car.
The program, called OreGo, is currently voluntary, with space for an initial 5,000 participants. Drivers in the program will install a small dongle into their on-board diagnostics (OBD) port, standard on all cars after 1996. The device will track miles driven, and report that information via 3G to Azuga, the private company handling the technology.
ODOT will bill users 1.5 cents per mile driven. But, crucially, program bills will also credit back any gasoline taxes paid at the pump, which could turn into a refund for those buying the most gas per mile.
Charging gas guzzlers less might seem like a handout to drivers of Hummers and sports cars. But OreGo spokesperson Michelle Godfrey has a different example:
“You’ve got a single mom with kids who has to drive an older car . . . [under the gas tax], she’s subsidizing that new Prius owner to the tune of a couple hundred dollars a year. This evens the playing field.”
The program should also benefit business owners who need larger vans and trucks to deliver flowers or haul construction tools. All vehicles under 10,000 lbs. are eligible for OreGo, with semis and other freight vehicles handled separately.
ODOT turned to Azuga not just for help with technology, but also because, in the absence of a mandate, it needed business insights to attract participants to what is essentially a new tax.
Azuga is tackling the problem by offering users access to useful data. For now, that includes driving histories (potentially attractive to parents), and a car locator app. Azuga’s device also offers commercial fleet tracking tools, and new services are in development.
So far, OreGo is doing surprisingly well, with more than 700 registrants in the first week of the program, according to Godfrey. But that’s the start of a long trip—they’ll need to sign up 1 million drivers before making a dent in federal funding shortfalls.
Oregon has some history in infrastructure funding innovation—it was the first state to create a gasoline tax, way back in 1919. “Literally, it got us out of the mud,” says Godfrey. “We had no roads.”
She expects OreGo to have a similar impact, reversing the toll taken by years of inadequate funding. Godfrey says that Oregon has only been able to pave about half as much highway since the buying power of the gas tax started to fall off in the 1990s.
OreGo could eventually allow for more advanced pricing, such as incentives for fuel efficient vehicles, integrated tolling, and congestion pricing—charging drivers more for driving into city centers or during rush hour. That idea was piloted in Portland in 2006 and 2007.
Oregon is ahead of the curve on road usage charge system, but it’s not alone. Nevada, Washington, Colorado, and Wisconsin have all conducted exploratory studies, while California is planning a pilot program for 2017.
OreGo will be evaluated by the Oregon legislature in 2017, when legislators will decide whether to expand or modify the program.