1.5 cents per mile instead of gasoline tax

Why would you sign? Prius gas costs 5c/mi, and gas taxes obviously less than 30%.

 

Naaah.
I'm good.
I'll wait for the movie.

I read through their propogandogram on the program, and it seems well thought out.....if typically government-complicated.

One of the cool things about living in one of 50 United States is that the individual states can try new and interesting ways to solve problems.
I'll give OR kudos for giving some early adopters to be guinea pigs (their term) for a program that will eventually be mandated.

 

How long have I what?

Lived in Oregon - 1 1/2 years
Been using OReGO - since it started 2 months ago

 

I signed up my 2004 Astro Van, not either of the Prii. The Astro van has been converted to a camper van and gets about 20 mpg on trips and about 16 around town. I signed up because I was curious how the program would work and the trial doesn't cost me anything since the Astro's mileage is below the break-even. (The state has paid me $0.47 over the two months I've been signed up since I paid more in fuel taxes than is billed for the mileage)

I'm signed up with Azuga, a private company that does vehicle monitoring for fleets. There is also an option run by ODOT and one by Verizon.

 

Oregon has about 50 cents total tax, so a 25MPG car pays $300 at the pump, so $225 with the program.

Some states like CA getting up to $500 pump taxes on a 25 MPG vehicle. EV owners will not want to pay that. They will want to pay like a $100 fee. So the OReGO idea only works if regular cars pay a higher fee like 3 cents a mile with EV's given discount like 1 cents/mile.

Between that and privacy concerns, I do not think the per mile tax works very well. Let's just stick with pump taxes per gal, and EV's get a small fee, in my mind assume EV gets 50 MPG and calculate the fee.

 

Too simple.
No way to game the system.

 

The Oregon program only deals with state fuel taxes. The Federal taxes still go to the feds as usual. Oregon charges $0.30 in fuel taxes for each gallon of gasoline. At the typical 15K per year that is:

Fuel Tax: (15,000 miles / 25 mpg)*$0.30 per gallon = $180
Mileage Tax: 15,000 miles X $0.015 per mile = $225

 

That guaranties only guzzlers will opt for the per mile tax. The state will have higher costs, less revenue, higher oil consumption, and a more complicated system. Its hard to figure out which of those things is good for the people of oregon, but it may be good for people that want to drive cars that get less than 20 mpg. Is that who the politicians want to pander to in oregon today?

There are 3 fairly easy ways to tax

1) Registration fees
2) oil or gasoline and diesel taxes
3) per mile charge (based on odometer) in a yearly or 2 year inspection.

Or an expensive method require new equipement and tracking. This is good if you want to grow government and raise taxes every year.

 

Hard to get kickbacks on a gas tax.

 

The current program is a large scale test and is voluntary. They are taking 5000 vehicles of which only 1500 can be in the lowest fuel economy. If this goes statewide it will not be voluntary.

Easy but it doesn't factor in the amount of driving an individual does. Many people would find a system that taxes a person that drives 5,000 and 50,000 miles per year unfair. It would also be a lump sum of hundreds of dollars and many people don't have the cash to make large lump sum payments.

It works but gasoline consumption peaked years ago so tax revenue has been declining. As vehicles get more efficient the tax rate will periodically need to be increased. The tax rate also needs to be increased periodically to cover inflation and the increased cost of building and maintaining roads.

Simple but expensive. First it would require vehicle inspections. Currently inspections are only required in the Portland metro so Oregon would need to build DEQ stations across the rest of Oregon. If the odometer reading is taken during plate renewal Oregon would need more personal at the DMV in order have someone available to walk out a verify odometer readings. This would also require vehicle owners to physically take all their vehicles to the DMV on a yearly basis instead of renewing by mail. (Very unpopular) There is also the lump sum payment problem from item 1.

As mentioned above, only maintaining the status quo with fuel taxes doesn't require capital investments. Also the OReGO ODOT option does not have tracking for those concerned about privacy. The downside is that you pay for every mile driven instead of just miles in the state of Oregon.

 

I understand that, and that is why I think we in other states want to make sure

Who really cares, if by fair those 10,000 mile average drivers will pay more. I think people would be more interested in low fuel and car taxes than those fair ones with loopholes that end up being convoluted and more expensive.

So here you start, cars don't do much wear and tear on the road, a registration fee gets you access, the ability to use the roads when you want. A fuel tax hits those that drive more with higher bills. Its simple and effective.

well then there is a simple solution, you raise the tax per gallon to keep up with costs. I don't believe that caping things in 1993 with little cpi or efficiency inflators. In 1993 oregon gas taxes where 24 cents and federal 18.3 cents -42.3 cents, today they are 48.3 cents, but a simple cpi inflator would have it at 69.9 cents. That is just adjusted for inflation you are paying 21.6 cents less a gallon in 2015 dollars than in 1993. I don't think anyone should be suprised that there is a short fall, made up by other taxes. Oregon would need to raise gas taxes 9.6 cents from today, and the federal government 12 cents to just keep up with cpi, forget the prius and plug-ins.

That would be less expensive and less of an invasion of privacy than the gps scheme, that may soon not be mandatory. I agree I think just registration fees and fuel taxes is a better way.

How is that different than an inspection reading of the odometer? Wouldn't safety inspections (tires, lights, brakes) be better than just reading the odometer. If its just sending the numbers on the internet that is easy to spoof and hack.

 

• A flat fee per mile driven is not convoluted and doesn't have loopholes.
• A GPS is not required to bill by the mile. As I said before, the ODOT option does not have one.
• Paying a road usage tax monthly is much easier on most family budgets that a lump sum paid yearly

I think you are way underplaying the difficulties of paying fuel / road taxes yearly:

1. Many people don't have hundreds of dollars to pay a lump sum. An amount of road tax needed to fund our roads plus the existing registration / plate fees could easily add up to $500 or more per vehicle. MANY people don't have $500 to pay and the DMV does not take credit cards. Add up 2-3 cars and many people just don't have the money to pay a lump sum.
2. People hate going to the DMV. Replacing register by mail with the requirement to take every car you own to the DMV every year would be very unpopular.

 

I probably just don't understand your ODAT system then. If you remove the gas tax and pay by ODAT, how do you pay and get billed? How is that more convienient then paying a gas tax? If it is electronic how do they know you aren't spoofing the system if no one inspects that it is attached and is not hacked periodically?

No I am not saying that I would switch away from gas taxes, but they can simply raise registration fees if all of a sudden they think its unfair for plug-ins. Texas inspections aren't done at the dmv, they are done at gas stations, and oil change and brake places. Registration fees can be mailed, paid on line, paid at the grocery store, etc. No reason if the fees were high they couldn't be paid monthly like I think you are talking about for ODAT, I just don't understand the advantage of the extra complexity.

 

I am using Azuga not ODOT (Oregon Department of Transportation) but the method is the same. A device plugs into the car's OBD II port and monitors data from the ECU. From this data it knows how far the car has traveled and checks in daily to report the mileage. Once a month the mileage fee is charged to your online account. (It is a little more complicated during the trial because I am still paying fuel taxes at the pump. So the device also calculates fuel consumption and the corresponding fuel tax is refunded monthly. The fuel tax is credited and the mileage tax is debited. )

How do you keep the device from being hacked? I don't know, I'm not a IT specialist. I assume they do it the same way as for the fleet vehicles that use the same type of systems.

The problem isn't just plug-in and alternative fuel vehicles. The problem is that fuel consumption as a whole is declining and fuel tax collections along with it. At the same time the cost to build and maintain roads are increasing.

Paying monthly for a mileage fee using odometer reading would require the odometer to be checked monthly. Either that or have the DMV or inspection station read the odometer yearly and split up the fee into monthly payments. Neither are likely to happen as the first is too inconvenient for the driver and the second cost more for the DMV.

This technology isn't that complicated. Plenty of people don't have a problem with being billed monthly for their toll usage instead of throwing coins into a machine.

 

Sure this is the same type of idea as yearly inspections or every 2 year inspections. You simply are using a third party to collect the data, and yes without anyone inspecting such a system is easily spoofed.

An anual ispectioon or every 2 year inspection regime would have allow you to pay the state as you go, but at the time of inspection you would need to make up the difference or get a rebate.

In your system we have added a piece of equipment to replace your self reporting, and you have a third party collecting the money. So you add a surcharge to that inspection odometer reading. You could trust that people won't spoof the systems, but this is a rather trivial matter to figure out what information is being sent and reduce the milage reported. As I said in texas we have third parties (gas stations, oil change places, etc) do inspections to make sure there is not tampering and things work. You could add that check.

Again Oregon is using more gasoline than in 1993, but is collecting a lot less in taxes adjusted for inflation. You would need to raise the gas tax by $9.6 cents a gallon to pay the same taxes per gallon as that time. Polticians like to pretend these other schemes are needed, but for most drivers they are not, simply raising the gas tax would be unpopular but cost drivers less money. Older people and less tech savy need to be able to use the system without being forced to have a credit card on file that is billed, so there are more costs. These costs probably only add up to about 10% more or 4 cents a gallon, but there are more costs involved.

 

Who benefits from a pure miles driven based tax? Who benefits from removing any value based tax?

Take the guy who has an expensive car or two or three but who drives comparatively few miles per unit of time. Currently he pays based on gas used and value of cars. Relatively high.

The Corolla beater driver who drives a lot pays relatively little based on the value of his cars but pays for his high use of gas even with a relatively efficient car.

Under a pure miles driven tax, the fancy cars guy benefits because all he is paying is based on mileage and he no longer pays for the expensive cars.

And the efficient beater guy looses because the tax on miles driven (gas plus the miles driven tax) has to cover the shortfall in the total take the state needs to maintain the roads. The tax no longer is lower per mile driven for the efficient less gas using driver.

I'd also bet the formula is designed to cover any amount from general revenues the state is now putting into the road fund.

 

Oregon isn't considering changing their registration fees. They are looking at replacing their fuel tax with a mileage tax. All the license and registration fees stay the same. ($86 for registration and $24 for plates)

I don't see why someone that owns multiple cars should pay more to fund roads. No matter how many cars a person has they can only drive one at a time. Why does it matter if their driving is in 1 Corolla beater or split between 10 Porsches?

 

In texas, yes, registration fees are fairly low, and not based on the cars value like oregon. If the vehicle is heavy there is a surcharge on registration to help pay for road damage. In California and many other states there is a registration fee based on the value of the vehicle, kind of a property tax.

A pre 2000 beater will produce a lot more tailpipe emissions than a newer car. In this way california's fees enocurage people to keep cars longer as fees drop as cars age, and encourage pollution. There are emissions tests in california, but older cars are allowed to pollute more. Oregon does not have nearly the tailpipe pollution problems. If they do a per mile fee, I would expect less efficient vehicles will go up slightly but it will not be a big hit to the countries oil consumption. My main objection is to the GPS proposals, which require much higher taxes to implement and privacy concerns.

 

Registration fees are not based on vehicle value in Oregon. It is a flat $86 for a two year registration and $24 for plates. I'm aware that other states change based on vehicle value and yes, it is a form of property tax.

Again, a GPS is not required to charge a mileage fee.

As to cost, I would like to see a breakdown of the cost to do a mileage fee vs collecting fuel taxes. Our current system of collecting fuel taxes is not free.

 

yep

California and Oregon are actively discussing requireing gps's to collect road fees. It is not an idle threat nor a good idea.


The stations have to collect fuel taxes and sales tax on items (federal fuel tax), it is part of the cost of being in business. The cost to these businesses will not go down if you remove the fuel taxes for the state but leave state sales tax on items. The tax is simple, they post it, they collect it, they pay the state when they are paying the state for sales tax for other things the station sells.

Your new system has fairly low, but additional expenses. You have a third party buying and supplying transmitting devices, and I assume third parties monitoring and inspecting that they have not been tampered with. This third party then collects fees, net of credit card charges, takes a profit, then provides the funds to the state. Its some additional friction and adds costs that are not currently in the system, but allows polticians to claim they are raising user fees instead of gas taxes. polticians seem to like that, and even though the average person with a 25 mpg or better vehicle will pay more in taxes, some will vote for it, because these user fees sound more "fair".

Definitely if you have a 14 mpg vehicle you will save on this new scheme versus raising the gas taxes, but you said yours got 20 mpg. My guess is you would do better with higher gas taxes with the friction. Its not magic. The reason the gas tax no longer works is it has not gone up with inflaction. That per mile tax has to go up with inflation if its going to work. Its not a magic thing. There is inflation in building roads. My guess is oregon probably needs about 2.2 cents a mile to get rid of the gas tax.