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Paying per mile: New technology could charge drivers a road use fee

by JOE FRYER / KING 5 News

Posted on February 7, 2013

SALEM, Ore. – Mary Olson pays practically zero attention to the tiny device that is plugged into her car just below the steering wheel.

Her only reminder that it exists arrives in the mail each month in the form of a bill, which shows how the device is keeping track of every mile she drives and charging her for it.

Olson is one of about 50 Oregon drivers currently testing technology that could someday replace the gas tax with a system requiring people to pay a small fee for every mile they drive – an idea known as a road user charge.

“I’m very proud of the state of Oregon for being a leader on this,” said Olson, who sits on Oregon’s Transportation Commission.  “In order to maintain our transportation system, we need to come up with an alternative to the gas tax.”

As vehicles become more fuel efficient, the gas tax – which is 30 cents a gallon in Oregon and 37 cents in Washington – will generate less and less money.  In Oregon, gas-tax money funds about 58 percent of the budget used to take care of the state’s roads.

“If we’re using gasoline and diesel sales to fund our transportation system, we’re going to be in big trouble,” said Patrick Cooney with the Oregon Department of Transportation (ODOT).

Recognizing the problem early, Oregon started studying alternatives to the gas tax in 2001.  The state conducted its first pilot project in 2006, testing new technology that used GPS to charge people for how many miles they drove.

“It caught the attention of the nation because nobody had ever heard of such a thing before,” said Jim Whitty, who manages ODOT’s Office of Innovative Partnerships and Alternative Funding.

That pilot project proved the technology worked, but concerns about privacy followed, prompting Oregon to dramatically redesign the project taking place today.  Put simply, they’re offering more choices.

One option, dubbed the “advanced option,” still uses a device that has GPS.  The device can actually tell if vehicles are driving out of state or on private roads, so drivers are only charged for the miles they drive on Oregon’s public roads.

Olson is testing that option.

“I was incredibly surprised when I got my first month’s billing and it was incredibly accurate,” she said.

But Olson understands that option is not for everyone.

“You have the privacy issues, and they’re not to be dismissed,” she said.

That is why some of the options have no GPS.  Under the “basic option,” the device acts more like an odometer that simply counts miles, which means it does not give drivers credit for leaving the state.  They must pay for every mile driven, no matter where they go.

A third option links to the GPS that is already in drivers’ smartphones.  If drivers want to leave the state, they simply activate the app in their phone and those out-of-state miles are excluded from taxation, Whitty said.

Those who want to skip the technology altogether can simply pay an annual flat fee, although that charge might be higher than what they would pay if they used a device.

“By giving people choices, you get greater acceptance,” Whitty said.  “You also solve the privacy issue because now the government is not picking a box that everyone is suspicious about.”

In fact, all of the GPS options are administered by a private company, so the Oregon government has no access to drivers’ coordinates, Whitty pointed out.

Becoming law

Oregon could turn the program into law this year.  The state legislature will consider a bill that would require vehicles getting at least 55 miles a gallon to start paying the road user charge.  It would only apply to vehicles made in 2015 or later because Oregon wants to gently transition into this new system over the course of many years.

“It’s going to be a debate, but I think it’s one that we’ll be able to come to a consensus on,” said Rep. Tobias Read, D-Beaverton, who is also taking part in the pilot project.

Electric vehicles owners are paying close attention to the issue.  They currently pay no gas tax, but still use public roads.  Some feel that should be their reward for investing in such an efficient, environmentally friendly vehicle.  But others do want to contribute.

“Most of us want to pay our fair share,” said Gary Graunke, an Oregon electric car owner.  “We don’t want to be labeled as ‘skirters.’”

The primary question: how much should they be charged?

“As long as the number is a fair number, we’re happy to pay for what we use,” Graunke said.

For the pilot, Oregon is charging drivers 1.5 cents a mile, then giving them credit for the gas tax they paid.

Olson, whose SUV gets about 19 miles a gallon, is basically breaking even so far.   According to her first bill, she was charged $5.21 for driving 334 miles in a month.  That was slightly less than the $6.20 she paid in gas tax during that same period.  So she got a 99 cent refund for that month.

However, more efficient vehicles would not pay as much in gas tax, so they would likely owe a little more money at the end of each month.

“This is not going to be in addition to gas tax,” said Rep. Read.  “I’ve gotten some reaction for constituents, ‘Now you’re going to make me pay on top.’  No – it’s a replacement mechanism.”

Still, it is not an idea that everyone supports.

Brent Dowty, president of Mercury PDX, a Portland courier company, does not like the idea.  Even though his fleet likely will not qualify for the mileage charge in the near future, he is strongly opposed.

“I don’t like any more intrusion in my life,” Dowty said.  “You get a nice new car that’s very efficient and here comes the tax man, and I don’t like that.”

Oregon’s legislature will need a three-fifths majority to approve the road use charge, which might be a challenge.

While Washington is a few years behind Oregon in studying this issue, WSDOT is paying close attention to Oregon’s pilot.  In fact, about 20 people from Washington are actually taking part.  KING 5 will take a closer look at where Washington stands in this process next week.

Related links:

Oregon Usage Charge pilot project website

Blog by pilot project participants

Oregon’s Department of Transportation page for pilot program and task force

Final report on 2007-2007 pilot project


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