Opinion: Support Weight-Distance Tax Repeal in Oregon

By Ross C. Gaussoin, Chairman, Silver Eagle Industries, Portland, Ore.

When does a state tax represent an impost or embargo in restraint of interstate commerce?

f you’re familiar with the Oregon weight-distance tax, you might readily suggest that Oregon is “damn close.”

I was recently told by a national carrier that he was hearing driver contractors argue against accepting loads into the state of Oregon. When a contractor finds that he must pay 13.65 cents per mile to operate in Oregon and that his average in the balance of the states is closer to 6.5 cents when both registration and fuel taxes are considered, who can blame him?

Clearly, it is time to draw the line. Oregon is one of five remaining states to maintain this burdensome tax. Both New York and Idaho have come close to eliminating their weight-distance imposts in the last year of the century. In Oregon, after six years of aggressive legislative work, the 1999 legislature finally voted to eliminate the hated tax and come into compliance with the rest of the nation. In place of the tax, the law calls for the state to impose a fuel levy on trucking, which Oregon does not do at this time, and raise the fees for registering commercial vehicles.

Following the governor’s signing of the bill, however, the American Automobile Association decided to force a public referendum on the issue in hope of overturning the decision of the lawmakers. AAA used its membership rolls to get signatures on a petition that forces the referendum, which will be on the May primary election ballot. AAA in Oregon has historically shown its “anti-truck” bias. In 1992, it exercised the same tactic of mounting a petition drive to prohibit triple-trailers from using Oregon highways. That effort failed. The trucking industry mounted a vigorous defense of longer combination vehicles and won the battle in the public arena by approximately 60% of the vote.

The Oregon trucking industry has maintained a strong and appropriate position of agreeing to pay our fair share of expenses for the upkeep of Oregon highways. In 1999, the industry successfully lobbied the legislature to write the “fair share” policy into the Oregon constitution. As a result, the legislature is required to complete a new highway cost allocation study every two years.

Now AAA is arguing that trucks will get a break at the expense of automobiles if the weight-distance tax repeal is upheld. But AAA is in a corner. The Oregon Department of Revenue just issued its finding that under the repeal legislation, trucks will overpay their responsibility by $67 million over the next six years.

Under the “fair share” requirement, truckers will be entitled to get that money back in the form of reduced fees. So not only will the trucking industry pay reduced fees in moving to a structure based on a fuel tax and vehicle registration, it also will enjoy future savings.

The weight-distance tax has the ring of “fairness” to it, but the devil lies in the details. The simple fact is that in the weight-distance system too much money is siphoned off. Over 180 administrative personnel are employed just to manage the system. They won’t be needed with a fuel tax/registration program.

Also, trucker evasion is rife in weight-distance states. Every state that has used this method of collecting truck taxes has experienced 25% to 45% evasion rates. Oregon is no different.

The only way to assure collection of the weight-distance tax is by audits. Since Oregon does not impose a fuel tax on trucking, it does not enjoy audit reciprocity with other states. Oregon auditors must “hop around” the country to carry out this responsibility. Guess who gets audited: the large and the visible.

Now comes the hard part. Winning a state referendum will be expensive. We are committed to the battle, but help is badly needed. The rewards are well worth the investment. The industry came to the table big-time to defeat AAA on the triples issue in 1992. We must do so again this year.

Winning the battle in Oregon should sign the death warrant for the other state weight-distance taxes. So this is not just an Oregon battle; it is also a national battle.

Stand with us. Help with whatever funding you can provide. Whether you operate in Oregon or not, you will clearly gain from our success.