DALLAS — Oregon’s first-in-the-nation full-scale experiment to see if a per-mile fee could supplement the gasoline tax as the main source of highway funding reached its second anniversary on July 1 with high marks.


Gasoline taxes are the primary source of highway funding in the U.S., but the increasing fuel efficiency of modern vehicles threatens the revenue stream.
Gasoline taxes are the primary source of highway funding in the U.S., but the increasing fuel efficiency of modern vehicles threatens the revenue stream.
Bloomberg

The OreGO program is being seen as a success, said Michelle Godfrey, a spokeswoman for the Oregon Department of Transportation, after refunding $1.357.25 to participants.

Drivers who volunteered for the program were charged 1.5 cents per mile in lieu of the state gasoline tax of 30 cents per gallon, or about the same per-mile paid by the driver of a car getting 20 miles per gallon over 1,000 miles. Oregon DOT refunds the gas tax paid at the pump to drivers in the program so they are not double-taxed.

“This limited, voluntary program was not designed to generate revenue,” Godfrey said. “It is a test drive of a new system.”

A VMT fee would generate an additional $340 million of road revenue than the gasoline tax would bring in over the next 10 years, ODOT said, “because the [road usage charge] model is not susceptible to increased vehicle fuel efficiency.”

“Road use does not directly correspond to fuel use,” ODOT said. “If transportation funding is to remain sustainable in the long term, it must leave behind the early 20th century assumption that fuel purchases mirror road use.”

Participants included 1,238 vehicles and 1,103 drivers. Additional drivers are being recruited for the voluntary program, Godfrey said.

Drivers who volunteered for the program were charged 1.5 cents per mile in lieu of the state gasoline tax of 30 cents per gallon, or about the same per-mile paid by the driver of a car getting 20 miles per gallon over 1,000 miles.

The average fuel efficiency of passenger vehicles has increased by 7.5% since 2008, ODOT said, noting that a hybrid vehicle getting 35 mpg would pay $8.57 in gasoline taxes over the same distance.

Electric vehicles and other high-efficiency models contributed as much as gasoline vehicles to road wear and congestion, ODOT said.

“High fuel efficiency vehicles put an unfair burden on low fuel efficiency vehicles, while also putting wear and tear on the roads,” according the a recent state report on the program. “In a road usage charge system, all vehicles will pay an equal amount for the same miles traveled.”

Oregon, which in 1919 levied the first gas tax in the U.S., created a task force in 2001 to study a road user charge and followed that up with pilot programs in 2006 and 2012. The two-year statewide program that began in July 2015 was authorized by the 2013 legislature.

The legislature’s joint transportation committee approved a transportation spending package on July 1 that would raise $3.8 billion for highways and transit over seven years. The proposal, a slimmed-down version of a 10-year, $8.2 billion proposal in June from a selection panel on road funding, does not include a VMT fee.

The plan would raise the state gasoline tax by 4 cents to 34 cents per gallon, with the possibility of an additional 6 cent per gallon boost later. The funding plan also seeks federal permission to toll portions of Interstate 5 and Interstate 205.

The legislature is scheduled to recess by July 10.

Oregon’s gasoline tax generated $3.3 billion in the current two-year budget cycle, slightly less than half of the $5.82 billion of state transportation revenues collected during the period. The gasoline tax is expected to bring a combined $3.65 billion during fiscal 2018 and fiscal 2019.

Total road revenues through 2025 are expected to total $32.56 billion, with fuel taxes contributing $18.3 billion.

Oregon received a $2.1 million federal grant in fiscal 2016 to help resolve the VMT program’s issues with out-of-state travel, part of the $95 million provided over five years by 2015’s Fixing America’s Surface Transportation (FAST) Act for tests of large-scale road user charge programs.

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