Oregon to test per-mile tax in place of gasoline tax

Fewer of us will be going over the river or through the woods to grandma's house this Thanksgiving travel season, according to AAA.

That's bad news not only for sad grandparents who won't see their families, but also for state treasuries. The drop in travel, especially of the vehicular variety, is going to cost states tax money.

Overall, AAA projects that 43.4 million Americans will travel 50 miles or more from home during the Thanksgiving holiday weekend, which the travel group defines as starting today (Wednesday, Nov. 27) and wrapping up on Sunday, Dec. 1. That's a slight decrease from the 44 million people who traveled during the last Thanksgiving holiday period.

AAA says 90 percent of this year's Thanksgiving travelers, or 38.9 million people, will get to their destinations by vehicle. That's a decline of 1.6 percent, which means less gas tax money.

It's hard to read too much into one holiday. So many other factors must be taken into account when looking at people's decisions to travel in the first place and by what methods.

But the drop in auto travel is worrisome since it threatens states' income from gas taxes.

Gas tax alternatives: Fewer trips by car or truck are just part of the tax trouble states are facing.

Another part of the problem, from the tax collector's point of view, is more fuel efficient cars. Fewer fill-ups mean reduced gasoline taxes.

That's why this year Virginia began collecting an annual $64 tax from hybrid vehicle owners. Although conservation-minded drivers in the Old Dominion aren't happy with the new tax -- talk of repeal began as soon as it was enacted -- the idea is gaining traction. Similar measures are being discussed by other state legislatures.

But Oregon's approach to alternative transportation funding is getting the most attention, both good and bad.

Per mile taxation test: Oregon is finalizing the testing of a new tax based on miles driven rather than fuel consumed.

It shouldn't be a surprise that Oregon is taking the lead in refining transportation taxes. The Beaver State implemented the nation's first gas tax in 1919.

In 2015, some Oregon drivers will be able to volunteer to have their mileage tracked and taxed at 1.5 cents per mile. In exchange, they won't pay Oregon's 30-cents-a-gallon state gasoline tax.

They will, however, still have to pay the federal gas tax, which has been stuck at 18.4 cents per gallon since 1993.

As mentioned earlier, Oregon is not alone in evaluating ways to collect mileage fees instead of state gas taxes. The Los Angeles Times reports:

Nevada has already completed a pilot. New York City is looking into one. Illinois is trying it on a limited basis with trucks. And the I-95 Coalition, which includes 17 state transportation departments along the Eastern Seaboard (including Maryland, Pennsylvania, Virginia and Florida), is studying how they could go about implementing the change.

But Oregon's vehicle-miles traveled (VMT) effort, which will involve 5,000 drivers, is the largest such tax test to date. For that expansiveness, the state's 1.5 cents per mile tax earns this week's (late) By the Numbers honors.

Per mile tax pros and cons: Proponents of the vehicle-miles traveled (VMT) tax concept say it's a common sense solution to dwindling transportation dollars.

Some want to refine it further, incorporating a vehicle's weight into the VMT tax rates. This would ensure that heavy vehicles, such as 18 wheelers, that do more damage to roads pay more tax per mile than do much smaller vehicles, such as tiny smart cars.

Smart Car size compared to adult driver and extended cab SUV. Photo courtesy Smart Car Redesign.

Opponents are bothered by, among other things, the privacy issues of tracking a driver's travels.

When the smaller Nevada VMT tax trial began, the ACLU of Nevada warned on its website that "It would be fairly easy to turn these devices into full-fledged tracking devices.... There is no need to build an enormous, unwieldy technological infrastructure that will inevitably be expanded to keep records of individuals' everyday comings and goings."

My Chevy is pretty fuel efficient but I don't drive a lot, so a per-miles tax would work better for me. What about you?

As for privacy, I think trackers would get bored pretty quickly looking at my trips to my neighborhood grocery store or my jaunts up to my mom's every other weekend. But that's just me. Are you concerned about travel tracking issues connected to possible per mile taxation?

You also might find these items of interest:

• Travel tracking apps, website can help at tax time
• Government report fuels fear (again) of federal mileage tax proposal
• Washington State lawmaker says bicycles are bad for the environment

Comments

[AM]

"As for privacy, I think trackers would get bored pretty quickly looking at my trips to my neighborhood grocery store or my jaunts up to my mom's every other weekend."

I suppose. However, one of the consistent hallmarks of governments interested in control rather than good governance is attempts to control travel. We're lucky in the US that we've got good governance right now, but I don't think we need to make it easier for any future bad guy if it ever comes to that.

At any rate, there's already an easy way to tax miles driven without invasions into privacy. They're called toll booths. They even can adjust for big rigs by counting axles. :)

The problem is that the states have come to count on gas taxes, too. It just blows my mind we've subsidized and mandated better gas mileage only to see states prove unable to adjust to less energy usage.

[John]

"My Chevy is pretty fuel efficient and I don't drive a lot, so a per-miles tax would work better for me."

Correct me if I'm wrong (it won't be the first time). It appears to me that Oregon's current 30 cents/gal fuel tax and the 1.5 cents/mile tax breaks even for vehicles getting 20 miles/gal. Vehicles getting less than 20 miles/gal would benefit from the 1.5 cents/mile tax. Fuel efficient vehicles would pay more tax at 1.5 cents/mile.