Official says mileage tax ‘viable’ option to replace fuel tax

| 11/20/2007

The author of report in Oregon says a tax system based on miles driven could one day replace per-gallon fuel taxes at the pump.

James Whitty, manager of the Oregon Department of Transportation Office of Innovative Partnerships and Alternative Funding, said officials in all 50 states and Washington, DC, have their eyes on the report, which was nearing completion on Tuesday, Nov. 20.

Whitty gave Land Line a preview of what the report will say.

“It’s going to say that it’s viable,” he said.

The report is based on a pilot program conducted by the Oregon DOT from April 2006 to March 2007 to test a mileage-based tax system.

“We were asked to research a replacement of the state gas tax, dollar for dollar, so that’s what we’ve done,” Whitty said.

A test group of 285 passenger vehicles in the pilot program was split into three groups – one that paid a rate of 1.2 cents per mile driven and did not pay by the gallon; one that commuted in rush-hour traffic and paid 10 cents per mile and not by the gallon; and, a control group that paid taxes by the gallon purchased under the current method.

“Ninety-one percent of the participants said they would be willing to keep the system if the program was applied statewide,” Whitty said. “That’s positive.”

The program will not affect truckers in Oregon, because they already pay on a system of mileage and weight and not by the number of gallons they consume.

Whitty explained why a mileage-based tax system would be a viable alternative to a gas tax nationwide.

“We anticipate that motorists will move to more fuel efficient vehicles in direct proportion to increases in fuel prices. We’re starting to see it now,” he said. “As that continues, it will reach a point where gas taxes no longer can fund the needs of the road system. The conclusion is we have to move to a different funding system.”

Whitty said the system, if lawmakers at the state or federal level implement it, would collect mileage data electronically. The devices would be installed at the manufacturing level.

“We don’t believe retrofitting works and volunteer placement doesn’t work,” Whitty said. “You would basically run two systems for a while until everybody gets a new car that has the technology built into it. Some people would pay the gas tax and some people would pay the mileage fee.”

Whitty has traveled to other states to speak about the pilot program and will speak next week in Washington, DC.

He said officials in Colorado, Florida, Idaho and Minnesota are interested in the program, as are leaders in the influential state of California.

A transportation task force appointed by Colorado Gov. Bill Ritter is urging a similar pilot program for that state.

“All 50 states are watching,” Whitty said. “The federal government is watching. The U.K. and Europe are watching.”

Oregon isn’t likely to change the system for heavy trucks, Whitty said, because officials are happy with the state’s current weight-distance tax for trucks.

“It’s on a distance system only the rates change based on axle weight,” he said. “The number of axles and the total weight of the truck determine what the tax rate is, and that’s applied to the miles.”

When fuel taxes are no longer viable to fund roads and bridges, it won’t matter what type of vehicle someone drives or whether it gets 10 mpg or 100, Whitty said. What will matter will be the miles driven.

– By David Tanner, staff writer