The Oregon Department of Transportation has declared its test of the mileage-based tax a success. The Beaver State instituted the pilot project out of concern that increasing purchases of hybrid cars and non-gasoline powered vehicles would undermine the integrity of the gasoline tax. The test was designed to determine if it was practical to administer a program that taxed motorists on the basis of the number of miles they drove, rather than the volume of gasoline they purchased.
Oregon’s system relies upon a device inside the car to read the odometer and transmit it, along with a vehicle identification number, by wireless technology to the gas pump. The tax is calculated and added to the price paid at the pump. After that point, tax collection is the same as it is for the gasoline tax. Privacy advocates please note: The system cannot track your car when you slip off to see your girlfriend. States the report: The concept requires no transmission of
vehicle travel locations, either in ‘real time’ or of travel history.”
Key findings of the “Oregon’s Mileage Fee Concept and Road User Fee Pilot Program” report include:
- A mileage fee can be implemented to replace the gas tax as the principal revenue source for road funding.
- The mileage fee can be paid at the pump, making it almost indistinguishable from the motorist’s perspective, from how they pay the tax now.
- The mileage fee can be phased in gradually alongside the gas tax, allowing non-equipped vehicles to continue paying the gas tax — and allowing the state to capture revenue from out-of-state drivers.
- The system is compatible with congestion pricing. Different pricing zones can be established electronically, the fees charged, and the revenues collected when drivers fill up at the pump.
- Many levels of privacy protection can be implemented.
- Potential for evasion is minimal. Tampering with the on-vehicle device would result in default payment of the gas tax.
- Cost of implementation and administration is low.
To my knowledge, no one in Virginia is giving serious consideration to the mileage-based tax. But we should. The gasoline tax is living on borrowed time here, just as it is in Oregon. We need to start thinking about the future now.
I have advocated taxing motorists on the basis of the number of miles they drive, adjusted for the weight of the vehicle — heavier vehicles cause more wear and tear on roads, therefore they should pay more — and the amount of pollution they emit. Under my user-pays system, all monies from the Mileage Tax would be used for one purpose only: to fund road maintenance. The tax would be adjusted up or down as the cost of road maintenance rises or declines. (I have advocated other mechanisms for funding construction of new roads, which I will elaborate upon if anyone is interested.)
(Hat tip to Jonathan Mallard for pointing me to the Oregon study.)
