Oregon governor wants further look into mileage tax

| 1/7/2009

A year after a report in Oregon said a tax system based on miles driven could one day replace per-gallon fuel taxes at the pump, Gov. Ted Kulongoski released a budget proposal for 2009 that calls for a mileage tax on many vehicles.

As part of a transportation-related bill he has filed for the session, which convenes Monday, Jan. 12, the governor said he plans to recommend “a path to transition away from the gas tax as the central funding source for transportation.”

Kulongoski said changes are needed because people are driving less, they are using more fuel-efficient vehicles, and the fuel tax doesn’t go as far as it used to. He said those reasons are enough to come up with an alternative method to pay for transportation work.

To work toward that goal, Kulongoski wants the task force that studied and tested the idea of a mileage tax two years ago to continue their work. The pilot program equipped about 300 passenger vehicles with global positioning satellite devices that worked with fuel pumps at two service stations. The setup allowed participants to pay their mileage tax as they do their gas tax.

They found that the participants were receptive to the experience.

The program is not geared toward truckers in Oregon, because they already pay on a system of mileage and weight and not by the number of gallons consumed. Nevertheless, discussion on the issue at the federal level has the attention of the Owner-Operator Independent Drivers Association.

The truckers group says the debate over federal transportation policy needs to be settled before the funding mechanism is advanced. However, the advancement of the tax collection method appears likely.

“We think ultimately VMT is where the highway funding issue will have to go, but the capabilities to do that aren’t fully developed yet,” OOIDA Executive Vice President Todd Spencer said.

Advocates for the mileage-based tax system in Oregon acknowledge that any change is probably years away. The pilot program determined that manufacturers would need to install the technology in new vehicles because retrofitting vehicles would be too expensive. Older vehicles would continue to pay fuel taxes.

Critics say the program that uses GPS could allow the government to track the movement of drivers. However, proponents say the ODOT experiment showed that transmission of vehicle locations is not required.

To view other legislative activities of interest for Oregon in 2009, click here.

– By Keith Goble, state legislative editor

Staff writer David Tanner contributed to this report.