The Oregon Department of Transportation (ODOT) has announced OReGO, its road usage charge program designed to create "a fair and sustainable way to fund road maintenance, preservation, and improvements for all Oregonians."
Under OReGO, volunteers will pay 1.5 cents per mile for the miles they drive and will receive a credit for the .30 cents per gallon state fuel tax. Initially, OReGO is limiting the number of vehicles—cars and light-duty commercial vehicles—to 5,000.
The idea for OReGO has been circulating for years. In 2001, the Oregon Legislature formed a Road User Fee Task Force; its mission was “to develop a revenue collection design funded through user pay methods, acceptable and visible to the public, that ensures a flow of revenue sufficient to annually maintain, preserve, and improve Oregon´s state, county, and city highway and road system.”
To implement the idea, which was the first of its kind in the United States, the Oregon legislatures passed Senate Bill 810 in 2013. In May of this year, it launched its latest version of a curious infographic illustrating how the numbers work. The infographic compared the savings for a 2014 Toyota Prius relative to those for a 2014 Ford F-150, based on an annual mileage figure of 12,962, and an average gas price of $2.86. Interestingly, the Prius would pay $862.23 under the road usage model, or $116.66 more than the $745.57 it would pay under the current system. On the other hand, the F-150 would pay $21.60 less, or $2,049.43 vs. $2,071.04. The infographic points out that the Prius uses significantly less fuel, 460 gallons less, in the first place.
In California, the San Jose Mercury News reported that in fall 2014, Gov. Jerry Brown signed a law that set up a commission to study a road usage charge and establish a pilot program by Jan. 1, 2017. In addition, OReGO points out that now, several other states are developing similar pay per mile arrangements. For example, Washington State is studying and testing concepts similar to OReGO, and Indiana, Wisconsin, Michigan, Illinois, Maine, Delaware, and Florida are investigating the same.
The ODOT has published a web page to help those interested in volunteering sign up. OReGO kicks off on July 1, 2015.
Not everyone is pleased with the use of a miles-driven program as an infrastructure funding mechanism. The Institute on Taxation and Economic Policy had this to say about Oregon’s experiment: “Despite all the attention given to long-term transportation revenue issues in Oregon, the state’s new vehicle miles traveled tax is an unsustainable revenue source because it contains the same design flaw that has plagued the state’s gasoline tax for almost a century—a stagnant, fixed tax rate that is incapable of keeping pace with inflation.”