Oregon Proposes Miles-Driven Tax Instead of Gas Tax

By Chris Haak

01.05.2009

Hearing about this one reminded me of Washington state’s money grab attempts last year, when politicians were frustrated by the decline in gas tax receipts as people (for shame!) drove more efficient vehicles or drove fewer miles and attempted to recoup that lost money – again, only lost because people had changed their behaviors as folks hoped they would, and drove less and/or drove more efficient vehicles – via an excise tax based on the vehicle’s EPA fuel economy ratings.

This time, instead of an excise tax based on fuel economy ratings, Oregon has been testing a GPS-based system that tracks the number of miles driven and would assess taxes based on mileage driven.  This proposed system would then be able to charge, for example, a 45 mpg Toyota Prius the same tax as a 15 mpg Dodge Ram if the vehicles had driven the same distance, whereas with the traditional gas tax, the Ram driver would use three times as much fuel to travel the same distance, and would therefore pay three times as much gas tax.  And what a lovely device to stick upon your dashboard, isn’t it (photo courtesy of the Oregon Department of Transportation).

Putting aside the enormous privacy and complexity concerns of tracking the movement of every vehicle registered in Oregon for a moment, isn’t one of the few good things about a gas tax the fact that it assesses a financial penalty each time a less fuel efficient vehicle is filled up.  The same way $4 per gallon gasoline changed driving habits – and indeed car buying habits – during the summer of 2008 is exactly the kind of impact that a gas tax generally has on fuel consumption.  I hate advocating for additional tax increases (I’m generally fiscally conservative), but if in fact additional revenue needs to be generated to pay for the repair and maintenance of crumbling roads, bridges, etc., the smartest way to pay for it would be through an increased gas tax.  Frankly, a Dodge Ram doesput more wear and tear on the roads and bridges than a Prius does, as does the fact that three times more gasoline tankers will have to deliver fuel to the local gas station to fill the Ram than they would to fill the Prius.  To make up for falling revenue caused by less driving and/or more efficient vehicles, the gas tax could be set with either a floor gas price (such as not allowing the retail price of regular unleaded to go below $2.00 per gallon) and could also be indexed based on either the inflation rate or at a certain rate to keep up with the decline in revenue as everyone starts driving 40 mile per gallon cars.  The problem with the gas tax is, of course, that it’s politically unpopular.  If voters think that gas is already too expensive, they’d probably rather pay an additional tax elsewhere than pay more for gas.

Onto the privacy issue – the state would either issue a GPS tracking device, or – if enough states implemented similar rules – a consortium of states might require the tracking devices be factory installed in all new vehicles.  While advocates of the program claim that the device does not “track the cars’ locations in great detail,” that is of little comfort to the tinfoil hat wearers.  I’m not that extreme – my iPhone and CTS both are GPS-enabled – but I’m not crazy about the idea of the government being able to tell when and where I have been driving.  It’s not too many steps away from “you were at x point at 12:00 and you were at y point at 12:30, but they’re 45 miles apart.  How fast were you going, Mr. Haak?”

The complexity of installing GPS devices into every vehicle in the state isn’t something to take lightly, either.  The Oregon’s 24 cent per gallon gas tax nets about $240 per year from a 15 mpg vehicle driven 15,000 miles per year and nets about $80 per year from a 45 mpg vehicle driven the same distance.  If they’re trying to make up something in between in revenue – let’s split the difference and say $160 per year – wouldn’t there be a simpler alternative such as having owners submit their odometer reading during vehicle registration, then truing it up for cheaters when the car is sold (sort of how my water company reads my meter every other month, but bills me monthly – the months when it’s actually read, the company adjusts me upward or downward).  Or if there is an annual vehicle safety inspection (not all states have this), the garage could submit odometer and VIN records to the state to know how far cars were driven.  It’s true that not having the GPS-enabled device would allow the state to charge motorists even for miles driven outside of Oregon, but in most cases, that’s probably not a significant tally.

I really wish politicians would be honest with their constituents and look out for the best interests of the common good, rather than worrying so much about getting themselves re-elected.  If you need more money for transportation infrastructure, just level with the people, and say, “look, we need $x to fix these bridges and roads, and if we don’t do it, somebody might get hurt or killed.”  Put the plan to a referendum.  But don’t step on peoples’ privacy and, to borrow from a certain presidential candidate, please give us some straight talk.

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