Ore. Gov. Wants Additional Funds to Study Implementation of Vehicle Mileage Tax
By Michele Fuetsch, Staff Reporter
This story appears in the Jan. 12 print edition of Transport Topics. Click here to subscribe today.
Oregon Gov. Ted Kulongoski (D) is asking the state legislature to fund additional studies on how to replace the traditional gasoline tax with a mileage tax.
Kulongoski wants $5 million to continue funding a task force that determined as part of a pilot program the state could successfully collect taxes based on vehicle miles traveled, said spokesman Rem Nivens.
“Less money spent on gasoline as cars become more efficient and more people purchase alternative energy vehicles means less gas tax revenue,” Kulongoski told the legislature late last year.
Kulongoski’s support for a VMT tax comes as a Congressional commission on surface transportation infrastructure financing is set to issue a report later this month that, according to The Associated Press, recommends replacing motor fuel taxes with a VMT taxing system.
Last year, another federal commission, the National Surface Transportation Policy and Revenue Study Commission, made a similar recommendation.
The next step for Oregon’s VMT task force is to explore technological implementation on a wide scale and to launch policy discussions on such questions as balancing the needs of rural versus urban drivers, said Shelley Snow, spokeswoman for the Oregon Department of Transportation.
“Oregon was just the first to give [VMT] a test in a pilot program to see if it was even feasible,” said Snow. “Results were awaited anxiously by everybody.”
With about 300 motorists and a handful of gas pumps in the Portland area starting in 2006, Oregon found it could successfully capture tax revenues based on vehicle miles traveled, Snow said.
The vehicles and pumps were equipped with technology akin to that in cell phones and electronic toll-collection systems such as E-ZPass. The field test measured miles traveled and taxed drivers accordingly.
Depending on the fine points, a VMT program in Oregon might not change much for truckers, according to Bob Russell, president of the Oregon Trucking Associations.
The state is the only one in the country that does not tax diesel fuel. Oregon has taxed truckers by weight and distance since 1947, he said.
Russell added that increasing use of fuel-efficient vehicles is only one aspect of what’s driving the interest in a VMT system.
“I think more importantly, because of the huge instability of fuel prices, fuel taxes have become widely unpopular,” Russell said.
In 2000, the Oregon trucking industry backed a plan to raise the state gasoline tax a nickel in exchange for reducing the weight and miles tax. Voters overwhelmingly rejected the increase, Russell said.
However, with VMT technology in every vehicle, the federal government could collect its fuel taxes and then leave it up to states whether to have VMT taxes.
ODOT’s Snow said the biggest hurdle to VMTs is overcoming privacy concerns, such as making sure the VMT technology will track only miles traveled, and not the locations where people stop or buy fuel.
That sentiment was shared by Jon Kuhl, lead researcher of a broader VMT pilot project that started in September.
The Public Policy Center at the University of Iowa is field testing a VMT tax collection system in six states: California, Idaho, Iowa, Maryland, North Carolina and Texas.
Funded by Congress, the Iowa study will last two years and is different from the Oregon test in a very important way, Kuhl said.
In Oregon, the test vehicles could fill up at only three locations, while in the Iowa study, technology is required only on the vehicles, not on gasoline pumps.
Kuhl said he is skeptical of VMT initiatives limited to individual states.
“I think it would work much better as a national option . . . You need a national standard,” he said.
