Some states want to punish fuel-efficient car drivers

Oregon looks at taxing mileage instead of gasoline
By RYAN KOST, Associated Press Writer Ryan Kost, Associated Press Writer
– Sat Jan 3, 7:38 am ET


PORTLAND, Ore. – Oregon is among a growing number of states exploring
ways to tax drivers based on the number of miles they drive instead of
how much gas they use, even going so far as to install GPS monitoring
devices in 300 vehicles. The idea first emerged nearly 10 years ago as
Oregon lawmakers worried that fuel-efficient cars such as gas-electric
hybrids could pose a threat to road upkeep, which is paid for largely
with gasoline taxes.

"I'm glad we're taking a look at it before the potholes get so big that
we can't even get out of them," said Leroy Younglove, a Portland driver
who participated in a recent pilot program.

The proposal is not without critics, including drivers who are concerned
about privacy and others who fear the tax could eliminate the financial
incentive for buying efficient vehicles.

But Oregon is ahead of the nation in exploring the concept, even though
it will probably be years before any mileage tax is adopted.

Congress is talking about it, too. A congressional commission has
envisioned a system similar to the prototype Oregon tested in 2006-2007.

The National Commission on Surface Transportation Infrastructure
Financing is considering calling for higher gas taxes to keep highways,
bridges and transit programs in good shape.

But over the long term, commission members say, the nation should
consider taxing mileage rather than gasoline as drivers use more
fuel-efficient and electric vehicles.

As cars burn less fuel, "the gas tax isn't going to fill the bill," said
Rep. Peter DeFazio of Oregon, a member of the House Transportation and
Infrastructure Committee.

The next Congress "could begin to set the stage, perhaps looking at some
much more robust pilot programs, to begin the research, to work with
manufacturers."

Gov. Ted Kulongoski has included development money for the tax in his
budget proposal, and interest is growing in a number of other states.

Governors in Idaho and Rhode Island have considered systems that would
require drivers to report their mileage when they register vehicles.

In North Carolina last month, a panel suggested charging motorists a
quarter-cent for every mile as a substitute for the gas tax.

James Whitty, the Oregon Department of Transportation employee in charge
of the state's effort, said he's also heard talk of mileage tax
proposals in Ohio, Pennsylvania, Florida, Colorado and Minnesota.

"There is kind of a coalition that's naturally forming around this," he
said.

Also fueling the search for alternatives is the political difficulty of
raising gasoline taxes.

The federal gas tax has not been raised since 1993, and nearly two dozen
states have not changed their taxes since 1997, according to the
American Road & Transportation Builders Association.

In Oregon's pilot program, officials equipped 300 vehicles with GPS
transponders that worked wirelessly with service station pumps, allowing
drivers to pay their mileage tax just as they do their gas tax.

Whitty said the test, which involved two gas stations in the Portland
area, proved the idea could work.

Though the GPS devices did not track the cars' locations in great
detail, they could determine when a driver had left certain zones, such
as the state of Oregon. They also kept track of the time the driving was
done, so a premium could be charged for rush-hour mileage.

The proposal envisions a gradual change, with manufacturers installing
the technology in new vehicles because retrofitting old cars would be
too expensive. Owners of older vehicles would continue to pay gasoline
taxes.

The difference in tax based on mileage or on gasoline would be small —
"pennies per transaction at the pump," Whitty said.

But the mileage tax still faces several major obstacles.

For one, Oregon accounts for only a small part of auto sales, so the
state can't go it alone. A multistate or national system would be needed.

Another concern is that such devices could threaten privacy. Whitty said
he and his task force have assured people that the program does not
track detailed movement and that driving history is not stored and
cannot be accessed by law enforcement agencies.

"I think most people will come to realize there is really no tracking
issue and will continue to buy new cars," Whitty said, noting that many
cell phones now come equipped with GPS, which has not deterred customers.

Others are worried that a mileage tax would undermine years of
incentives to switch toward more fuel-efficient vehicles.

"It doesn't seem fair," said Paul Niedergang of Portland, that a hybrid
would be taxed as much as his Dodge pickup. "I just think the gas tax
needs to be updated."

Lynda Williams, also of Portland, was not immediately sold on the idea
but said it was worth consideration.

"We all have to be open-minded," she said. "Our current system just
isn't working."