Infra Insight Blog

On July 6, 2013, Oregon became the first state to establish a voluntary road usage charge system for transportation funding.  Senate Bill 810 authorizes the Oregon Department of Transportation (ODOT) to charge up to 5,000 motorists 1.5 cents for every mile they drive rather than the traditional 30-cent gas tax.  The law comes on the heels of two ODOT pilot programs that examined alternative funding mechanisms to the gas tax and tested the vehicles-miles traveled fee (VMT) system.

As reported here, the Executive Director and CEO of the International Bridge, Tunnel and Turnpike Association, Patrick D. Jones, called the bill’s passage, a major victory for alternative forms of transportation funding across the country at both the state and federal level.  The bill’s bi-partisan support was largely attributable to the voluntary nature of the program—vehicle owners can apply to participate in the VMT program and may terminate at any time by notifying ODOT.  The bill also tackled privacy concerns by requiring enrolled drivers to select a third party, certified by the State of Oregon, to track their vehicle mileage.  ODOT has yet to determine the mileage tracking method; however, previous pilot projects involved smartphone applications and GPS devices.  Whatever the method, the third party will supply the in-vehicle data collection device, as well as offer billing and payment collection services.

With the gap between gas-tax-based revenue and the cost of highway construction and maintenance growing due to stagnant tax rates and the increase in fuel efficient cars on the road, taxing motorists on a per-mile basis offers a potential, albeit controversial, highway funding solution.