April 21, 2015 | Michelle Godfrey, ODOT Communications
The future is by its nature unknown, but one thing is certain in the transportation industry: it costs a lot of money to maintain our transportation system — not to mention building new capacity or funding projects that expand choices.
Since 1993, the price of road and bridge construction and maintenance has more than doubled. Meanwhile, the federal Highway Trust Fund has run out of money. And with more cars becoming more fuel efficient, revenue from both the federal and state gas taxes is failing to make up the gap.
Over the past decade, Oregon has experimented with ways to tackle transportation funding shortfalls. A taskforce and several studies considered many options, including raising the gas tax, taxing tires, adding a flat fee for users and others. One concept rose up as being the most fair and the most economical: a fee based on how much you use the road, also known as a “per mile” charge.
On July 1, ODOT will launch OReGO, the nation’s first operational program that charges motorists directly for their road use. It is the first step toward a future in which technology-enabled pay-for-use methods replace per-gallon gas taxes to fund our highways.
It’s no surprise Oregon is the first in the nation to study this alternative in-depth and put it to a real test. The 1919 Oregon Legislature created the first gas tax in the country, to “get Oregon out of the mud.”
But it’s been clear for quite some time that the gas tax won’t work going forward: there’s a federal mandate to make cars get better gas mileage — and some cars on the roads don’t use any fossil fuels at all. While these efforts are great for the environment and help reduce our dependence on oil, they have another large impact: they reduce both federal and state revenues for transportation. Yet we still want and need our roads…
So nearly a century after Oregon pioneered the nation’s first gas tax, we’re creating another first: OReGO. The 2013 Oregon Legislature authorized the nation’s first per-mile road usage charge, where drivers will pay 1.5 cents per mile traveled in Oregon instead of the state gas tax at the pump. OReGO is an exclusive club: only 5,000 cars and light commercial vehicles will be allowed to use OReGO beginning in July 2015.
Here are some common questions and answers about OReGO.
Is this an additional tax?
No. The OReGO’s per-mile fee is a replacement for the gas tax, not an additional tax.
Participants in OReGO will receive a credit or refund of gas tax paid while they are in the program. OReGO will calculate gas consumed, and gas tax paid, while it also calculates the per-mile charge. If the two are equal, the driver pays nothing. If the gas tax paid exceeds road charges billed, the driver is eligible for a refund. And if the road charge exceeds what was paid in gas tax, the driver will get a bill from OReGO for the difference.
Will state government track my whereabouts with GPS?
No. The law that created OReGO does not require GPS. In fact, it demands that at least one mileage reporting option not use GPS, and that motorists are allowed to choose the devices and reporting services they will use.
Savvy consumers who are comfortable with technology may want the benefits offered by an option that includes GPS technology. For example, if you drive out of state, a GPS option could mark those miles as not billable. Other folks are not as comfortable, and will choose to not use GPS. Either way, safeguards are in place to make sure ODOT will only count number of miles you drive in Oregon, but not where you’ve been.
Is this program unfair to rural Oregonians?
No. Some say a per-mile charge would be unfair for rural drivers because they must drive longer distances to do basic things such as go to work, school, and the store. But the truth is, Oregon motorists already pay a distance-based tax — the current fuel tax.
And rural Oregonians don’t necessarily drive more. Recent ODOT surveys found no consistent theme for rural driving — some people drive more, some less. Sometimes, extremely rural Oregonians reported driving much longer distances for medical appointments and shopping, but that was offset by less frequent trips overall than their urban counterparts.
Doesn’t charging by the mile create a disincentive to owners of fuel-efficient vehicles?
No. In ODOT’s focus group research, electric vehicle owners tended to favor road use charging. They appreciated the fairness of the model as they voiced their concern for maintaining the roads they drive on every day. They agreed that all drivers should pay a fair share for the roads they use.
While a per-mile road use charge would be a new bill to pay for EV and alternative fuel vehicle owners, their overall savings in fuel consumption far outweighs the cost of a road charge.
The OReGO model gives Oregonians a glimpse into the not-too-distant future, with “connected cars” and other technology changing our lives for the better in ways we can’t even imagine. We do know from our past experience that a road usage charge program offers a way to charge drivers fairly based on the direct value they get from using public roads.
As it stands, Oregon’s century-old gas tax is fast becoming obsolete. Over time, older vehicles will phase out and the entire fleet will become highly fuel efficient, virtually vaporizing the way we fund our transportation system. OReGO is a fair, balanced and sustainable funding model that will ensure your roads are maintained safely for you and your family far into the future.
May 16, 2016
The OReGO program has been operating since July 1, 2015. Senate Bill 810 created the program, and successful implementation of […]