Oregon Urged to Expand Road Fee Program

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DALLAS – Oregon should expand its existing vehicle-miles-traveled road fee system to include all new, more fuel-efficient cars by 2025, the state's road user fee task force recommended in a report released this week.

Replacing the state's gasoline tax of 30 cents per gallon with a per-mile fee would ensure that steady increases in vehicle fuel efficiencies would not reduce state transportation revenues, said Vicki Berger, chairwoman of the road task force.

The task force's recommendation to the Oregon Legislature should be part of the debate when lawmakers consider a new transportation funding package in 2017, she said.

"Road usage charging is the future of transportation funding," Berger said. "It's important that transportation funding move forward in the next legislative session." Oregon is entering the second year of a VMT program in which motorists pay a road user fee of 1.5 cents per mile instead of the state gasoline tax. The OreGO effort was limited by law to 5,000 motorists, but so far only 1,263 have signed up.

The program is popular with participants despite the low turnout, said Oregon DOT spokeswoman Michelle Godfrey.

More than 90% of motorists in the program reported in a survey that their experience has been excellent or good, she said.

"No one had ever done anything like this before," Godfrey said. "This allows us to get away from a funding source dependent on the consumption of fossil fuels."

Oregon's gasoline and diesel taxes generate about 40% of the annual revenues to the state highway fund.

In fiscal 2016, the state fuel taxes provided $530 million to local governments and Oregon DOT for road and bridge projects. Oregon will receive an average of $529 million per year of federal highway funding through fiscal 2020 from the five-year Fixing America's Surface Transportation Act.

The Oregon DOT's latest revenue projections show a 5.6% increase in state gasoline tax collections in fiscal 2016, but a considerable slowdown is seen in 2017 before revenues begin dropping significantly in fiscal 2020.

A road user charge would generate an additional $340 million dollars over the next 10 years by stemming the loss of fuel tax revenues, the study said. These funds would be enough to help preserve more than 500 miles of a two-lane rural road.

"As vehicle technology increasingly decouples use of roads from gallons of fuel used, so must transportation funding if it is to remain sustainable in the long term," the VMT task force said in its report.

Fuel efficiency of light vehicles has increased by 7.5% since 2008 and should take a big jump as federal standards set an efficiency target of 54.5 miles per gallon for all new vehicles in 2025, said Oregon DOT assistant director Travis Brouwer.

"If a driver's use of the road is no longer dependent on the purchase of fuel, the condition of Oregon's roads and bridges shouldn't be either," he said. "Charging a per-mile fee would ensure transportation funding does not decline due to increased fuel efficiency."

The state wants to transition its functional VMT system into a viable program that could help bridge the growing gap between fuel tax revenues and infrastructure needs, Brouwer said.

Private partners collect the mileage data and report it to the state, protecting the privacy of motorists in the program, he said.

"We've learned how to run a road usage charge system using private sector partners, which no other state has done before," Brouwer said.

The Federal Highway Administration in September awarded grants totaling $14.2 million to eight projects to test road user charges. The grants, which are authorized by the FAST Act, will increase to $20 million per year in fiscal 2017 through 2020.

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