The future of highway tax: pay-by-the-mile

In the race to figure out how to properly tax highway usage in the world of high-efficiency vehicles, Oregon has come in first. They are now the first state to start a pay-by-the-mile tax on their highways.

Their program is called OReGO and it will cost drivers one and a half cent per mile. Currently the program is in the testing phase and is capped at 5,000 volunteer participants. The ultimate goal is to make the program mandatory, and revolutionize the way states collect highway tax.

The program has been in development over the last 15 years as a response to the massive amounts of high mileage vehicles on the roads. The program should eventually replace the gas tax which has resulted in stagnant revenue even though roads continue to need repaired.

“We’re trying to make up for a growing deficit, really, because inflation’s eating away at our ability to buy asphalt and rebar and the things we need to maintain the roads,” said Tom Fuller of the Oregon Department of Transportation.

The national usage fee alliance reports there are 28 states in various stages of creating a similar usage program. However, this type of program is not popular with everyone, especially when it comes to how two of the three current OReGO systems track and store every move of the cars.

“To put a GPS monitor in everybody’s car, the government already knows too much about us as it is,” Jeff Kruse, a Republican lawmaker told Fox News.

Another concern relates to how Oregon’s Department of Transportation will collect the usage taxes. In the current gas tax system collecting the revenues is fairly cheap, however, in the OReGO system vendor fees will take up 40 cents of each dollar collected.

Not everyone is against the tax though, some residents support the fee as a way to fairly tax everyone using the highways in Oregon.

“I’ve been free-loading on the highways for 20 years driving electric cars or hybrid cars, getting at least 40 miles to the gallon. So I haven’t been paying my share,” David Hastings, a long-time hybrid owner and Oregon resident, said.

Certainly all other states will have their eyes on Oregon as they continue to revolutionize their highway tax collection system.

[Fox News]