Federal Government Invests in Oregon’s ‘Pay-By-The-Mile’ Experiment

The U.S. Department of Transportation has given Oregon $2.1 million to expand its “pay-by-the-mile” experiment as an alternative to the gasoline tax, buying into the idea that the current method of paying for highway repair and maintenance may be outdated.

Under Oregon’s pilot program, “OreGO,” people sign up to put a small reporting device in their cars that measures the number of miles they drive on Oregon roads. Oregon collects 1.5 cents a mile on the distance participants drive and issues a refund of the gasoline taxes they pay at the pump.

The goal is to see whether taxing by the miles driven is a better way to raise revenue than taxing at the pump now that fuel-efficient cars and inflation have eroded federal and state gasoline tax revenue.

Drivers of gas-guzzlers generally pay less under the mileage program, while drivers of fuel-efficient cars pay more. But the program is designed to be revenue-neutral to the state.

The pilot program was designed for 5,000 participants, but the state has had trouble attracting people over worries they might get charged more or that their activities might be subject to monitoring with the GPS-like device that tracks the miles driven. So far, only 1,263 vehicles have been enrolled in the program, according to the Oregon Department of Transportation.

“Inviting Oregonians to volunteer to pay a new tax is a daunting communications task, especially given concerns over privacy and fairness,” said Tom Fuller, spokesman for the Oregon department. “What we’ve found is that the more people know about road usage charging, the more they support it. So this grant will help us do just that — educate Oregonians about the why and the how of this idea. We think it will lead to more folks signing up.”

Interestingly, he said, owners of fuel-efficient cars like the hybrid Toyota Prius have signed up in greater numbers, although they might pay more, indicating that transportation-conscious residents understand the program.

Statistics show that in Oregon and across the country, the gasoline tax has not kept up with inflation, even as demands for transportation infrastructure repair and construction have skyrocketed.

“One of our nation’s biggest challenges is how to meet the funding needs of our nation’s crumbling surface transportation infrastructure in a long-term, sustainable way,” said U.S. Rep. Peter DeFazio, Democrat from Oregon. “I’ve long said that we must consider all viable options to meet this pressing need.”

California and Washington are studying the Oregon program with an eye toward setting up pilot programs of their own.