Splitting the check to help fund our roads

Splitting the check to help fund our roads

June 1, 2015 | OReGO Communications

At first glance, the pairing of a Hummer and a Prius might strike you as the ultimate odd couple.

While a Hummer tips the scales at about 6,500 pounds with a V8 engine, a pint-sized Prius c hybrid checks in at 2,500 pounds.

So, aside from having four wheels, what could these two cars possibly have in common?

It might surprise you that each contributes about the same wear and tear to our roads and bridges. No matter how tricked out your light-duty car, pickup truck or passenger van may be, there is no significant difference in the impact these vehicles have on a typical highway.

However, the same cannot be said for large commercial trucks and big rigs. Because of the heavy payloads they carry, an 18-wheeler weighing 80,000 pounds causes the same amount of road damage as 9,600 passenger vehicles.

In Oregon, this additional wear and tear is paid by truckers in the form of weight-mile taxes, which are charged on all commercial trucks and buses weighing more than 26,000 pounds. Vehicles weighing less meet their obligations by paying taxes at the pump.

Whether you drive a Prius or a Hummer, there is one universal truth of all cars: they need good roads.

That’s why OReGO exists: to create an equitable transportation funding solution that charges passenger and light-duty commercial vehicles the same per-mile use rate—because they all cause about the same wear and tear to our roadways.

After all, everyone should pay their fair share for good roads—no more, no less—right? We think so, too.

Are you ready to try this new way to fund well-maintained, reliable roads? Then head on over to myOReGO.org and sign up for the Interest List today!

38 thoughts on “Splitting the check to help fund our roads

  1. When looked at by the square inch, I suspect the load on the pavement is about the same for both vehicles, as the Hummer probably has fatter tires to distribute the weight. That said, put studs on those tires and the destruction of the pavement must be significantly greater.

    • Jack Arendt says:

      When looked at by the square inch, I suspect the load on the pavement is about the same for both vehicles, as the Hummer probably has fatter tires to distribute the weight. That said, put studs on those tires and the destruction of the pavement must be significantly greater.

      • Michelle Godfrey
        Michelle Godfrey says:

        That’s true, Jack – studded tires damage our roads. The good news is that, in a 2013 study conducted by ODOT, we found fewer and fewer of these types of tires are being sold and used in Oregon – a record low number, in fact – so the amount of damage is certainly going down, and simply taxing those tires would not generate enough to replace the gas tax. The OReGO program that begins on July 1 is aimed at finding an eventual replacement for the gas tax (because the revenue being generated from sales of gas will continue to decline), and it appears a per-mile fee just might be able to do that.

  2. Graciela Moran says:

    It doesn’t matter the size of the vehicle, it should be measured the same. The road doesn’t know the difference.

  3. Jason Deemer says:

    I believe Oregon and other states should have their bridge/weight formulas reevaluated to a more up-to-date formula. I believe the formula that was federally put into the system was back in the 1970’s. Well a lot has changed since the ’70’s and I believe there are much more effective ways for us to determine what’s deteriorating our roads and bridges here in Oregon. I actually think the use of the heavy use taxes for trucks hauling heavy loads is a good way to stimulate money for the road uses, but I don’t think there’s a need to now go after more money and start taxing every car that uses our roads. UNLESS, we do a maximum tax for ALL trucks and cars registered in Oregon. But then again, isn’t that why we pay registration fees????? There are more cars on the road now, so that should balance out the funds used to repair the roads if all the cars and trucks are registering properly. This is just my opinion.

  4. One thing certainly will make a difference in road damage and that is STUDDED TIRES. They should either be outlawed in Oregon or people that still use them should pay a higher fee to cover the damage they do to our Oregon roads. Thanks.

    • Agree, I’ve never seen such damage from Studded Tires and how loud it makes the roads. ODOT needs to apply the user tax model to studded tires to generate resources to repair the damage they cause.

  5. Brad Miller says:

    If an 80,000 pound truck causes the same damage to the highway as 9600 passenger vehicles, should the 80,000 pound truck pay 9600 times the amount of money a passenger vehicle pays for the same distance traveled?

    “After all, everyone should pay their fair share for good roads”

      • Rates for truckers are found at http://www.odot.state.or.us/forms/motcarr/reg/9928.pdf. As I read the table, an 80,000 lb truck pays 16.38 cents per mile (about 11 times higher than a car). If a passenger car’s correct rate is 1.5 cents per mile, then a truck doing 9,600 times the damage should pay $.015 * 9600 = $144 per mile! It appears to me that, based on damage done, either 1.5 cents per mile is way too high for cars or 16.38 cents per mile is way too low for trucks.

        • Brad Miller says:

          You are correct, 0.015/mi is too high for cars and 0.1638/mi is too low for trucks. My original question was simply to point out that the taxes should reflect the damage done to the highway by the vehicle as their discussion above implies. Since the revenue system is not fair in general, implementing a tax/mi for passenger vehicles and light trucks only and not proportionally increasing the taxes on trucks is even less fair. By simply raising the gas tax, we eliminate the need for creating a “Rube Goldberg” type bureaucratic tax collection system.

          • tomfuller

            Hey Brad,

            Really appreciate all of your thoughts on this!

            One comment on this post – if we simply raise the gas tax, which is one option the legislature might consider, we continue the unfairness of having lower mpg vehicles subsidize higher mpg vehicles who use less fuel and thus pay less in fuels tax.

          • Brad Miller says:

            This is a reply to Tom Fullers note below which apparently does not provide a reply button.

            Tom,

            I believe you have it backwards. Passenger cars and light trucks have always subsidized the cost to repair the roadway from the damage done by large trucks through the mechanism of a gas tax=use tax.

            Unless the taxation system is formed around the notion of damage to the highway, then every other taxation system is inherently unfair.

            The newer high mileage, very low emission vehicles are very lightweight and cause virtually no damage to the highway and by logical extension should not be penalized. They really should be rewarded.

            The proposed system of tax/mile simply enhances the inherent unfairness. Passenger cars,light trucks and especially hybrids and electric are will now carry more of the burden to subsidize the cost to repair the damage to roadways due to large trucks.

            Let me emphasize that the only pretense for the whole program is to raise money for highway repair and maintenance. It really should not be a social experiment in trying to repair a misrepresented taxation injustice.

            The only cost effective method of raising more revenue is to incrementally raise the gas tax over the next 3-5 years and index it to the COLA. An increase to the gas tax alone would increase revenues by 40-50%. As high mileage vehicles become a more significant proportion of vehicles on the road, then implement a small property tax assessment on all vehicles as many other states are doing currently.

            This would, of course, eliminate the need for your department, sorry.

            Brad Miller, PE

  6. John Beaston says:

    9,600 cars (38,400 tires) = 1 commercial truck (18 tires and 80,000 pounds). So, it must not just be the weight but some combination of the number of tires and the weight.

    What about cars using studded tires? What is the relative wear and tear between a studded and non-studded tire equipped car? What percentage of cars use studded tires for what percentage of the year? Given the ruts that appear on a newly-paved road after just one year, it would seem studs are a real wear-and-tear generator.

    • Brad Miller says:

      The weight of the truck is the primary factor in determining damage to the highway pavement. All large truck configurations are reduced to what is called an ESAL or Equivalent Single Axle Load of 18,000 pounds for design purposes. So when the pavement structural sections are designed the ESAL is used.

      Yes, studded tires cause tremendous damage to the highways. I would ban them. This would probably not go over well so some method of controlling their use with damage fees charged would be necessary.

    • Michelle Godfrey
      Michelle Godfrey says:

      Hi John! It’s true, studded tires damage our roads. ODOT’s 2013 study showed that fewer of these tires are being sold and used in Oregon – a record low number, in fact – so the amount of damage is certainly going down, and simply taxing those tires would not generate enough to replace the gas tax.

  7. 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)

    • Michelle Godfrey
      Michelle Godfrey says:

      Hi Brad! Thanks for commenting. While raising the fuel tax might be a good short-term option for increasing the State Highway Fund, it fails to create a long-term and sustainable solution to the problem. As consumers continue to buy high-mpg vehicles, they buy less and less fuel and Oregon’s fuel tax revenue continues to dwindle. The new law, SB 810, seeks to establish a fair and sustainable solution to the problem that closely follows Oregon’s long-standing “user pays” principle.

      Oregon has applied an additional registration fee for hybrid vehicles in the past, but repealed it. The thing is, hybrid and electric vehicles, as you point out, are still a rather small percentage of the fleet. Meanwhile, gas and other fuel-powered vehicles are becoming so much more fuel efficient, and also paying less gas tax. We need a long-term solution that is based on true usage – of the roadways – and not dependent on the sale of fuel.

  8. To say a Prius C and a Hummer should be taxed at the same rate per mile ignores all the problems that drilling, transporting, and burning fuel causes. We need to focus on the bigger pictures of national security and the environment too.

    • Michelle Godfrey
      Michelle Godfrey says:

      Absolutely, Patrick. If we are serious about reducing our dependence on fossil fuels – for national security and protection of the environment – shouldn’t we de-couple our road funding from the consumption of those fuels? In that sense, the per-mile charge could be considered the more responsible option.

  9. Weight-mile was considered years ago, but Salem couldn’t carry the political water. Maybe it will stick this time. (Simplifying the math for this example) At 15,000 miles driven in a year, a Humvee at 15 MPG will pay $300 in OR gas tax, while the Prius pays $112. If the road wear/tear is the same, they should pay the same.

    Raising the gas tax always gets hung up in Salem, even though prices (excluding taxes) vary by $1.00/gal or more in a single year.

    Lastly, stop trying to prohibit studs. People who live on or travel over steep hills absolutely need the studs when it’s icy. Siping won’t keep a car on steep ice. Add $ to the stud price; that’s fine with me. I’ll pay the stud fee before I will slide my car into a tree on my steep 600-foot-long driveway.

    • Brad Miller says:

      My next post was going to outline exactly what you did in your first paragraph. Maybe I will post a more detailed discussion of this issue that hopefully others notice. The opening discussion at the top of the web page suggests that we all pay our fair share, then spends a lot of time obfuscating the issue. Passenger vehicles have always subsidized the construction/repair/maintenance of the highways. Large trucks apply 95% of the damage to highways, so they really need to pay more.

      Raising the gas tax is clearly the most cost efficient method of increasing revenues, that is why they won’t do it. The federal gas tax should also be indexed to the COLA. The federal gas tax has not been raised since 1993 and remains at 0.184/gal.

      I do understand your concerns about the studded tires. It is one of those things that when you need them you really need them. A surcharge on studded tires at the point of sale may be a good tactic to help mitigate the damage as long as the surcharge can be solely directed at road maintenance.

      Brad Miller, PE

  10. How do you separate the miles driven in Oregon from those driven in other states? I drive to California and Washington on a regular basis and would not like to pay extra for doing so.

    • If the measuring devices have GPS, they can tell when you’re driving outside Oregon and can deduct those miles.

    • tomfuller

      Hi Mel,

      Two of our commercial account managers provide location-enabled devices that will stop counting miles when you go out of state. With the ODOT Account Manager there is a simple odometer counting device that does not know when you’ve left the state. In that case you’d have to account for your miles and let that account manager know so those miles could be credited.

    • Michelle Godfrey
      Michelle Godfrey says:

      You could select the GPS reporting device, which would automatically discount out-of-state miles. Or, if you select the non-GPS option, you could apply for a credit of the miles you drive out of state.

  11. For those who believe that a rate per mile fee is un fare, why shouldn’t those who use the roads pay for the roads? The per mile fee is the fairest way I v’e seen to fund the upkeep needed to solve the problem. Tell one other fairer way to do it other than the” why should I be required to contribute ” argument. We have it extremely easy as far as vehicle tag prices go, take a look around at the costs in just the states around us and see who has it better.

    • Brad Miller says:

      The only fair way to pay for highway maintenance costs is to pay as a function of damage done to the highway by the type of vehicle. Since trucks contribute approximately 95% of the damage, they should pay 95% of the costs. Otherwise, as we have done for a hundred years, passenger vehicles subsidize the costs of maintaining the highways by virtue of their numbers and the taxes generated from the fuel consumed.

    • Gerry Allen says:

      “Users” of roads includes everyone who consumes products distributed by road-travelling vehicles, not just the drivers of vehicles. Since gas and other road taxes are “flat” they burden lower-income folks the most. User taxes seem to be a fair solution, but due to the non-progressive nature of these taxes they are not.

  12. It seems that the “fair share” statement really means “fair, compared to other vehicles in the same classification”, where passenger cars are in a different class than commercial big rigs. We have to consider that increasing the revenue from big rigs will merely be passed on to consumers in the form of higher prices. Indirectly, we’re all paying those fees when we shop at the grocery store. It’s either higher prices at Walmart, or it’s a bit more for each mile you drive. It’s unfair to force those who don’t own a car to subsidise road upkeep through higher food prices just to keep the use tax on passenger cars low.
    Assuming that the statement about equal road wear from by all sizes of passenger cars is accurate (I’m going to check into the research here), then vehicles, like hybrids, that get very high gas mileage are paying far less in road use taxes than vehicles that get lower mileage. Electric vehicles pay no tax at all for their use of those roads (is that fair?). As more and more high mileage and electric vehicles are using Oregon roads, there has to be a means to spread the cost of maintaining those road among the people who use them. Long ago when gas taxes were introduced, most passenger cars that comprised the majority of road use got somewhat similar gas mileage (almost all really low), so everyone was paying a “fair share”. There were also far fewer roads, and the commercial vehicles were also much smaller. It’s just not that way anymore.
    Raising the gas tax now is only a very short term solution, at best, to bring in the tax revenue needed. Further it places an increasing burden on many people who are the least able to afford it. A Prius still costs considerably more than similarly sized used vehicle that is more than 5 years old that gets half (or less) the gas mileage. I’d also venture that for every Hummer, there are probably many hundreds of mid-size cars that are 5 to 20 years old on our roads. Look around and see what types of cars make up the majority of road users. It’s these vehicles, not the small number of Hummers, that will be contributing the vast majority of the tax revenue. People with lower incomes are still mostly unable to afford electric or very high mileage hybrid cars. They’re the ones who are driving less expensive vehicles that don’t get the super-high mileage. If gas taxes go up, then the burden on lower income people would be very high, and increasingly more and more unfair each year. Eventually we may come to a day when every car that uses gasoline will have super high mileage. But with a gas tax system, those people would pay 100% of the tax, while fully electric vehicle owners pay zero.
    I concede that a high gas tax does make the 5 year cost (vehicle cost + gas + tax + insurance) of a low-mileage car that is inexpensive, and a much more expensive high mileage car pencil out to be a lot closer to one another, maybe even to the point that it’s the same. But that just makes an inexpensive car a whole lot more expensive over 5 years, and that’s what lower income people can least afford. That’s what a use-based tax is supposed to address – asking people to pay tax in proportion to their use of Oregon roads, and not on the number of gallons of gasoline they use. Further, It really isn’t supposed to be a way to force people to use fewer gallons of gas, or to combat global warming, or any of a number of environmental issues. It’s great if it does, but it’s designed to just spread the costs of maintaining roads among the people who use them in an equitable manner. There are many other initiatives that we all should talk about in order to combat the problems from global warming, air quality, etc. Road use tax just isn’t one of them.
    Despite the fact that we can all see many cases where the use tax will not be entirely fair, I will say that the best way to start with a use-based tax system is to keep it simple, even if this means that vehicles with studded tires are getting away with murder (of our roads). Once the system is in place and everything settles down (there’ll be new devices in cars, reporting of mileage, collecting fees, etc), the time will come to start addressing specific cases where it’s not so fair. Studded tire users probably should pay more while those tires are on the vehicle. Also consider that some roads are much more costly to build and repair than others. Should the people who use those high cost roads pay more? I live in a neighborhood where my neighbors and I pay an annual tax for the maintenance of our streets. Should I have to pay a use tax when I drive on them too? If the majority of miles that are put on an off-road vehicles are actually off-road, what should the tax be for the mileage that wasn’t on any road at all? My point here is that there is a lengthy list of examples where the use tax isn’t going to be applied with total fairness, but
    those are all things that are solvable. We can have a discussion about how to fine tune the tax system, but only after we’ve put it in place and made it simple and easy to administer. Demanding that the system take into account dozens and dozens of scenarios where it doesn’t achieve perfect equality is really just a way to make sure we do nothing at all.
    So I say, let’s get started. It won’t be absolutely perfect at first, but neither is the gas tax and that’s getting more and more unfair every year. Moving to a use-based tax puts us on a much better road, so to speak, that will ensure that we have the funding to maintain our streets and highways well into the future.

    • Brad Miller says:

      As I asserted above, the only fair method of paying for road maintenance should be based on the damage done to the road by the vehicle, thus the trucks should pay more.

      If you read the introductory public relations prepared text at the top of the web page, you should note that the tax/mi will only be implemented for passenger cars and light trucks. What this is really saying is that the people driving the vehicles that do the least damage(almost none) will be paying to fix the damage done by trucks who will not have any increase in their share of taxes. I guess that seems fair? Except for my original assertion concerning paying according to damage no other method of raising revenue is fair.

      Let me emphasize that the only pretense for the whole program is to raise money for highway maintenance. It really should not be a social experiment in trying to repair an economic injustice. Seemingly the choice should be something easy to implement. Of all the various ways to increase revenues this tax/mi should be the last choice. Another method to raise revenue, which is used by many states and easy to implement, is to charge property tax on your vehicle. Older vehicles pay less because, well they are old and not worth anything. Newer vehicles pay more. As vehicles age they pay less tax. This addresses the notion that the taxes unfairly tax the poor who cannot afford newer vehicles. This method would raise substantial revenue without the need for creating a “Rube Goldberg” type bureaucratic tax collection system.

      Had the gas tax/gal been indexed to the COLA, ODOT would have 40% more revenue today. How much more money do they need? rhetorical question. My observations of state DOTs is that they will create highway projects to meet the available funding and endlessly claim they do not have enough money. Kind of like moving into a bigger house, you will expand to the space available.

      Another observation of mine is that the highways in Oregon are in really good shape when compared to say California, so how underfunded are they?

      • I understand what you’re saying, but I disagree with your assertion that truckers should pay more, perhaps even a lot more in order to more accurately reflect the damage done to highways by their vehicles. The problem with this is that truckers don’t pay any tax, and they won’t pay any under any other program including this one. They never have paid any of the gas tax, unless they’re driving empty. Truckers pass their costs along to whoever hired them. If you think truck drivers or truck owners are going to just start making a lot less money by absorbing an increase in road maintenance taxes, I’ll say now that I don’t think that’s going to happen.
        The people who will have to pay the increased costs of transport are those who hired the trucks to transport food or goods. That’s everything from grocery chains to farmers and other Oregon producers of goods who all use big rigs to transport food and products. On the receiving end, like grocery stores, the increase in costs will be passed to consumers in the form of higher prices. That just passes the costs to everyone who shops in Oregon. Maybe this is what should happen, because it certainly does spread the tax to everyone in the state. But now we’re talking more about something like a sales tax, albeit one the is only thinly disguised.
        On the originating end, farmers are going to have to choose between making less money in order to be competitive with non-oregon farmers who will have lower transport costs, or they’ll have to raise their prices in order to cover the increase in taxes, or they’ll demand some sort of government subsidy. Let’s assume they’re not going to just pay it and let that be it.
        The fact is that the actual tax that will be assessed on large heavy trucks will always be a politically influenced value. In order to help farmers compete successfully, government will be unlikely to shift a huge amount of the costs of road maintenance to them. The same with grocery chains. Higher food prices are not all that conducive to getting re-elected. Lawmakers are going to set tax rates on trucking in order to get what they can without harming the competitiveness of Oregon producers or businesses who rely on trucking transport. The idea that a tax on semi trucks would be any more than it is now is just not going to go anywhere, or it will come full circle and we’ll all have to subsidize it. Demanding that they pay several thousand times what they’re paying now, in order to match the damage done by their rigs is a non-starter no matter what method of tax you might invent. To make up the subsidy, the rate on passenger cars will have to go up, and we’re right back where we started. Oregon residents are going to pay all of the money to maintain our roads, one way or another. Asking the users of those roads to pay a little more than those who don’t drive on them is a reasonable way to spread the load.
        Personally, I’d rather just go to a sales tax and get rid of all the other “not a sales tax” forms of taxing people. It means that the people who have more to spend will pay more, and it won’t matter if you live in west portland and drive one mile to the store, or if you live in southeast oregon and drive 100 miles to get groceries. A tax like this is not so much assessed based on the damage your vehicle does, but on the benefit you’re taking, in part, because those roads are there. But talking sales tax in Oregon is political suicide, so we’re faced with having to invent all kinds of ways to “not a sales tax” people.

  13. Sustainable, efficient funding is a good transportation system goal. So is reducing vehicle emissions. I’d like to know more about the tradeoffs between those goals with a per mile user tax. Will increasing low-mpg-vehicle costs result in greater emissions than other road maintenance models?

    Safety and quality of life are also good things to maintain. On local streets for example, the noise from and space needed for a large truck is clearly greater than a small car. How will our finance policies incorportate these social costs?

  14. You posted a link to a letter to the editor of LA Times to confirm the assertion that “(b)ecause of the heavy payloads they carry, an 18-wheeler weighing 80,000 pounds causes the same amount of road damage as 9,600 passenger vehicles.”

    Here’s a link to a Virginia Bicycling Federation article dated December 2, 2009 that makes the same statement. They provide a link to a CBO report to verify it.
    http://www.vabike.org/vehicle-weight-and-road-damage/

  15. “It might surprise you that each contributes about the same wear and tear to our roads and bridges. ”

    Could you please provide a citation that provides some type of scientific analysis to back up this claim?

  16. David L Sloan says:

    I am personally at a loss as to what the OReGO test is attempting to determine. The highway tax rate is currently $.30 per gallon – so the breakeven at a substitute $.015per mile would be 20 miles per gallon. i.e., if a car drives 300 miles at 20 MPG and uses 15 gallons of gas, the road tax would be 15 gal. X $.30/gal., or $4.50. That is $.015 per mile on the 300 mile trip. If a vehicle gets greater than 20 MPG, the owner is paying MORE road tax at $.015 per mile than he would at $.30 per gallon. Conversely, if a vehicle gets less than 20 MPG, the owner will pay LESS road tax at $.015 per mile than he would at $.30 per gallon.

    It seems logical that the only vehicle owners that would sign up for OReGO are those who drive vehicles that get less than 20 MPG (assuming an alternative mileage rate of $.015 per mile). Logically, no one that has a car that gets high gas mileage (over 20 MPG) would sign up for OReGO.

    Therefore, it seems that the highway tax collections would logically decrease by the OReGO test – since everyone that signs up will pay less tax than they would have otherwise.

    Perhaps some politicos could claim that because so many people voluntarily signed up, the program must be good, and we should initiate it for everyone.

    Is it just me????

    • David L Sloan says – “Is it just me????”

      Well, no, it’s all of us!

      This Orego system can only work effectively and fairly with ≈100% participation.
      This initial test is just a for operational validation. Hence the volunteer aspect.
      You can be assured that when the system is actually put into effect, as mandated by law, you and I will both be required by law to participate. Pleasant thought, no? So your scenario where all the gas guzzlers participate and everyone else bails probably won’t happen.

      So, the system is hugely inequitable on pollution/CO2 grounds because it refunds gas tax to high and low polluters alike, removing the proportionate taxing of fuel burnt by each.
      So we would need to have a gas tax too, ramped up over the years to meet tightening CO2 standards.
      I can just hear the endless howls about double taxation etc.

      The real fun hasn’t started yet!

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