Oregon set to implement pay-per-mile tax
SALEM — Oregon is set to become the first state in the nation to implement a pay-per-mile tax.
The measure is currently voluntary, starts in July and will be open to only 5,000 drivers.
Participating drivers will have their mileage recorded and be charged 1.5 cents per mile. They’ll get credit to offset the fuel tax at the pump.
It’s an interesting experiment by the state as an attempt to offset the dropping revenue from the fuel tax. This is a problem across the United States as more drivers opt for fuel-efficient vehicles. That’s good for the environment, Oregon policymakers say, but bad for roads and bridges.
Money collected from the fuel tax goes toward repairing and maintaining that infrastructure in Oregon, and the state frames this program as “a new way to fund roads and bridges for all Oregonians.”
But the reality is that for some Oregonians, especially those who drive fully electric vehicles, opting into OReGO, as the program is called, would mean forking out lots more money.
The question for policymakers: How do you convince Oregonians to opt for a new tax?
Michelle Godfrey, of the state’s Department of Transportation, is not naive about that challenge. “No one wants a new tax, and this is what it is,” she said. “It’s an alternative to an existing tax, but most people are not aware of what they are paying in gas taxes, so they have to be educated.”
The state put out a comparison for drivers and a calculator on its website to see how it would work in practice.
Here’s where the math comes in.
The state calculates that the average Oregonian drives 12,962 miles a year.
Oregon compared what drivers of two cars — A 2014 Toyota Prius and a 2014 Ford F-150 — would pay driving that distance. Under the fuel tax model, the F-150 pays more into the state coffers by way of the fuel tax: $216.03, to the Prius’ $77.77.
But if both opted into OReGO, they’d both pay the same amount into the state’s highway fund — $116.66 — but under this plan, the F-150 saves money. Not a lot, but after the state offsets the fuel tax with a usage fee, the F-150 driver would save a little over $20 a year. The Prius driver, by comparison, would fork out almost $200 more a year.
“It might be a bit of a shock at first to see the actual amount they are paying, but I believe it is empowering to drivers,” said Godfrey. “It will help them to determine how they drive and if certain trips are necessary.”
The state has a whole section on its website devoted to answering the question: Just why would someone decide to voluntarily give the state more money? The answer: We all need good infrastructure, bad roads do damage to all cars — especially lighter ones — and drivers of electric vehicles and fuel-efficient cars who were polled said they wanted to pay more for better roads.
So far, 1,600 have signed up, Godfrey says, adding that the real number could be higher because account managers have partnered with her agency to help get people on board.
Oregon’s program isn’t permanent, but state officials are betting that other states will be watching. They say 18 other states are looking into similar options.
Thus far, bikes and motorcycles will not be eligible, and drivers who have GPS systems won’t get dinged from driving out of state.