Some states want to punish fuel-efficient car drivers!

Oregon looks at taxing mileage instead of gasoline
By RYAN KOST, Associated Press Writer Ryan Kost, Associated Press Writer
– Sat Jan 3, 7:38 am ET



PORTLAND, Ore. – Oregon is among a growing number of states exploring
ways to tax drivers based on the number of miles they drive instead of
how much gas they use, even going so far as to install GPS monitoring
devices in 300 vehicles. The idea first emerged nearly 10 years ago as
Oregon lawmakers worried that fuel-efficient cars such as gas-electric
hybrids could pose a threat to road upkeep, which is paid for largely
with gasoline taxes.

"I'm glad we're taking a look at it before the potholes get so big that
we can't even get out of them," said Leroy Younglove, a Portland driver
who participated in a recent pilot program.

The proposal is not without critics, including drivers who are concerned
about privacy and others who fear the tax could eliminate the financial
incentive for buying efficient vehicles.

But Oregon is ahead of the nation in exploring the concept, even though
it will probably be years before any mileage tax is adopted.

Congress is talking about it, too. A congressional commission has
envisioned a system similar to the prototype Oregon tested in 2006-2007.

The National Commission on Surface Transportation Infrastructure
Financing is considering calling for higher gas taxes to keep highways,
bridges and transit programs in good shape.

But over the long term, commission members say, the nation should
consider taxing mileage rather than gasoline as drivers use more
fuel-efficient and electric vehicles.

As cars burn less fuel, "the gas tax isn't going to fill the bill," said
Rep. Peter DeFazio of Oregon, a member of the House Transportation and
Infrastructure Committee.

The next Congress "could begin to set the stage, perhaps looking at some
much more robust pilot programs, to begin the research, to work with
manufacturers."

Gov. Ted Kulongoski has included development money for the tax in his
budget proposal, and interest is growing in a number of other states.

Governors in Idaho and Rhode Island have considered systems that would
require drivers to report their mileage when they register vehicles.

In North Carolina last month, a panel suggested charging motorists a
quarter-cent for every mile as a substitute for the gas tax.

James Whitty, the Oregon Department of Transportation employee in charge
of the state's effort, said he's also heard talk of mileage tax
proposals in Ohio, Pennsylvania, Florida, Colorado and Minnesota.

"There is kind of a coalition that's naturally forming around this," he
said.

Also fueling the search for alternatives is the political difficulty of
raising gasoline taxes.

The federal gas tax has not been raised since 1993, and nearly two dozen
states have not changed their taxes since 1997, according to the
American Road & Transportation Builders Association.

In Oregon's pilot program, officials equipped 300 vehicles with GPS
transponders that worked wirelessly with service station pumps, allowing
drivers to pay their mileage tax just as they do their gas tax.

Whitty said the test, which involved two gas stations in the Portland
area, proved the idea could work.

Though the GPS devices did not track the cars' locations in great
detail, they could determine when a driver had left certain zones, such
as the state of Oregon. They also kept track of the time the driving was
done, so a premium could be charged for rush-hour mileage.

The proposal envisions a gradual change, with manufacturers installing
the technology in new vehicles because retrofitting old cars would be
too expensive. Owners of older vehicles would continue to pay gasoline
taxes.

The difference in tax based on mileage or on gasoline would be small —
"pennies per transaction at the pump," Whitty said.

But the mileage tax still faces several major obstacles.

For one, Oregon accounts for only a small part of auto sales, so the
state can't go it alone. A multistate or national system would be needed.

Another concern is that such devices could threaten privacy. Whitty said
he and his task force have assured people that the program does not
track detailed movement and that driving history is not stored and
cannot be accessed by law enforcement agencies.

"I think most people will come to realize there is really no tracking
issue and will continue to buy new cars," Whitty said, noting that many
cell phones now come equipped with GPS, which has not deterred customers.

Others are worried that a mileage tax would undermine years of
incentives to switch toward more fuel-efficient vehicles.

"It doesn't seem fair," said Paul Niedergang of Portland, that a hybrid
would be taxed as much as his Dodge pickup. "I just think the gas tax
needs to be updated."

Lynda Williams, also of Portland, was not immediately sold on the idea
but said it was worth consideration.

"We all have to be open-minded," she said. "Our current system just
isn't working."

 

How about taxing based on a combination of gasoline per gallon, with a
multiplier related to the gross vehicle weight, to account for the real
cause of road deterioration - - tonnage.

Prius driver.

 

I was thinking along the same lines, but tried to throw in a factor
for tire footprint, sending me off for a glSS OF WINE.....

 

Hmmmmm.....

Put scales at the gas pump, and dynamically calculate the tax when the
handle is lifted...hmmm...

 

Ah, "it's not fair" is the great rallying cry of the masses. It really
means "make somebody else pay for the benefits I enjoy."

The damage each driver causes to the roads is based on how many miles
they drive and only vaguely on how much gasoline they burn; from that
perspective a mileage tax makes more sense than a gasoline tax. The
problem with the proposals discussed in the article is the intrusive
notion of the government putting a GPS system in your car and monitoring
where you drive- which is none of their business. A simple odometer
reader would be far more reasonable, but even this introduces problems
with how to bill and collect those revenues. A whole new government
administration would be required.

The damage drivers do to the environment from burning fossil fuels is
based on how much fuel they burn, not on how many miles they drive. A
"carbon tax" for funding addressing the problems thus created makes
sense and appropriately places the burden on people who drive
inefficient gas guzzlers (with apologies to poor folks who can only
afford cheap, used and generally boat-like cars).

The gas tax is paid up front and is practically invisible to the
consumer, which makes it easier to collect. The decline in gas tax
revenues is not due solely to people driving more fuel efficient cars,
however, it is largely due to people just driving less- billions of
miles less in 2008 than in 2007. This has the effect of reducing wear
and tear on the roadways, which in turn should reduce governmental costs
and reduce the burden on the gas tax collection system; however. locally
at least much of the damage to the roads is caused by weather and that
will proceed apace whether people drive or not.

 

A carbon tax to 'save the environment' makes sense in the same way a
blood sacrifice to the sun god for good crop yields made sense.

 

In one of my college economics classes way back when, the professor
discussed the fairness of weighing your salad bar puchase and paying per
ounce vs. per plateful. Interestingly enough, many students used the
"it's not fair" cry on the per ounce method...

 

Until you reach the level of very large truck there isn't much actual
road damage from simply driving a vehicle on the road. The current
$$$ per Gallon gas tax is probably the fairest tax ever put on a
product. There is no reason to change it other then it needs to be
increased simply to keep up with changes in fuel economy and
inflation.

 

Lets see if I understand this. I live in Oregon and I have two vehicles,
one weighs 2,000 LB, the other weighs 3,000 LB. one gets 20 MPG, and the
other gets 35 MPG, doing 60 MPH on the interstate. I pay MORE in gas taxes
for the one than the other, per 100 miles driven, right?

The one that gets 35 MPG has only two seats, the other seats seven. I
have a wife and four children, all of us can NOT travel in the one that gets
20 MPG. If I must take us all, 100 miles away, to my in-laws house. I
need to make five trips in both directions with one, at total of ten trips
and only one each way with the other, for a total of two.

Now my question is, which situation would cause the most damage when I'm on
that trip and should I sell the one that weighs 2,000 LB and gets 20 MPG to
pay the per mile tax and keep the other because I have a wife on four
children or should just keep the one that weighs 2,000 LB and gets 20 MPG
and just leave my wife and kids, as well as Oregon?

 

You currently pay more in one than the other by virtue of one needing more
gas than the other to get where you want to go.

The problem for the state is that if the vehicle fleet becomes more
efficient and the CAFE (for lack of a better illustration) goes from 17.5 to
22.5, then there will be fewer taxes collected. (I pulled those numbers out
of my ass, what the numbers are and what they go to does not really matter.
All that matters is our cars are getting more efficient, so fewer gas taxes
are being collected.)

If they go to a GPS-based taxation system, then presumably all motorists
will be taxed on the distance they travel, not the gas it takes to get
there -- as is the current tax model. Part of the current consumer
motivation to move toward fuel efficient cars is causing the state to
collect fewer taxes.

If gas taxes are $0.20 per gallon, and your Suburban gets 15 mpg while a
Yaris gets 30 mpg, the Surbuban will pay $1.33 in gas taxes to go 100 miles,
the Yaris will pay $0.67. With a GPS-based system, all drivers can be forced
to pay $1.33, defeating (at least in part) the whole purpose of buying a
Yaris.

 

Right, and if we want to encourage people to who don't need Suburbans to
drive Yarises, this is a bad idea. Far better to simply raise gas taxes
until the required revenue for infrastructure maintenance is collected.

Then, if someday we find that a significant portion of the fleet is
running on fuels that aren't taxed, we should revisit this discussion.
Until then, no need to make it any more complex than it has to be.

nate

(you do realize you were replying to Mike Hunt, right?)

 

Yes.

 

I can't see it working.

Everytime the goverment gets involved it adds a management and regulatory
burden that will become unmanageable.

Just suck it up and raise the gas tax.

No new technology burden please.

Plus the feds and the states will have to settle on a standard system.
Hah!!!

 

Better yet, the government could stop diverting gas tax funds to
purposes other than keeping up the roads.

 

That causes people to drive even less, so it could get into a vicious
cycle. Reminds me the nicotin taxes that became such a large part of
state revenues. The more they raise it, the less they get out of it.
pj

 

In Canada they raised the cigarette tax so high at one point that
people actually <gasp!> cut back on their smoking and revenue started
to fall off. They promptly lowered the tax.

But our addiction to oil is much, much worse than our addiction to
nicotine. For most people, it's MUCH easier to cut back on smoking
than it is to cut back on driving.

 

At some US Naval officer clubs you used to pay according to the height
of your sandwich.

 

Whoa, that's something!

True, but for many driving is a necessity of life, while smoking is not.
Being able to go wherever you want and whenever you want is also an
important part of freedom that public transportation can not provide as
fully as one's own car. Most politicians know it and that's why they
feel they can tax it to death and there will still be people driving.
pj

 

I am all for use taxes, I just don't see this as manageable.

The problem is that in transporation this means tolls and the entire
infrastructure and industry which growa around them.

Imagine your surprise at registration time when you are presented a huge
mileage based tax bill.

It may seem fair but what about the person that has to drive a long way to
work because there is no effective public transit system available.
Promises of Light rail which will not be built for years will not pay that
renewal tax.

I think it will be hugely unmanageable.

Just raise the gas taxes

By the way, I remember those same clubs doing the Mongolian BBQ by the ounce
as well.

At some US Naval officer clubs you used to pay according to the height
of your sandwich.

 

And the driver is weighed along with the car, of course.