A pothole of missing gas tax looms
May 19, 2015 | OReGO Communications
What’s the first thing you look for when adding a new vehicle to the family garage? Sure, high style, new gadgets, and leather interiors are great, but for most Americans, fuel economy is the top consideration when car shopping.
Everyone loves saving time and money by making fewer trips to the gas station. And fuel economy standards for new cars are on the rise, with the EPA requiring that new cars offered for sale in the U.S. in 2025 average at least 54.5 mpg. Additionally, the rising popularity of alternative fuel vehicles helps reduce CO2 emissions and improves our air quality. So everyone wins, right?
Well, it turns out there is one loser in all this: our roads and bridges.
That’s because the bulk of our transportation funding is tied to fuel tax revenues, which are directly affected as more and more high mpg vehicles take to the roads. The federal gas tax has not increased since 1993, but the average fuel economy of new light-duty vehicles in the United States has increased significantly since then. Oregon’s gas tax went from 24 cents per gallon to 30 cents per gallon in 2010 (and before that, hadn’t been raised since 1993), but in 2013, Oregonians bought fewer gallons of gas than they did in 1999!
So while people continue to drive, they are buying less gas – and that means fewer dollars dedicated to taking care of our roads. We’ve known this pothole loomed on the horizon, so we began looking into alternatives to the gas tax more than a decade ago.
After several tests, we’ve got what we believe is a viable program to replace the gas tax and the legislature asked ODOT to make it operational and see how it works. Yup, that’s OReGO, and as you probably know, we’re testing it out starting July 1. It’s a potentially sustainable transportation funding solution and we hope you can join us by giving this concept a try.
Under the OReGO program, transportation funding follows the “user-pays principle.” Instead of a gas tax, drivers (i.e. volunteers in the program) will pay 1.5 cents per mile to help keep our roads and bridges in good shape. OReGO is for passenger vehicles, pickups, hybrids and the like – commercial trucks and buses already pay a weight-mile tax in Oregon – and participants will have several options.
So we’re inviting you to do your part now to help pave over Oregon’s transportation funding pothole. If you haven’t done so already, head on over to the OReGO Interest List and sign up today! If you are on our interest list already, you’ll be hearing from us soon about next steps.
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Brad Miller says:
If the over-arching goal is to increase funding for highway maintenance and repair then why would it not be much easier to simply raise the gas tax?
In 1993 the gas tax was raised from 0.22/gal to 0.26/gal and to 0.30/gal in 2011. Had the tax/gal been indexed to the cost of living in 1993, the gas tax would now be approximately = 0.42/gal. This would result in ODOT collecting a very significant 40% increase in revenue.
How do we get there? Simply raise the gas tax 0.04/gal for each of the next 3 years while indexing the tax to the cost of living. This modest amount would be imperceptible when compared to the 0.35/gal swings in a month we just experienced.
By simply raising the gas tax, we eliminate the need for creating a “Rube Goldberg” type bureaucratic tax collection system. The revenue collection system for the gas tax/gal is already in place.
Until the proportion of very high mileage vehicles or electric vehicles becomes significant, maybe just charge a small surcharge on the registration fee. (Of course this sours the motivation to buy these type vehicles)