Last week, Oregon became the first state in the U.S. to give drivers the option to be taxed by the mile instead of by the fuel they use.
The idea is that as cars become more fuel efficient, drivers spend less money on gas, resulting in less money for the Oregon Department of Transportation to spend on improvements for roads and bridges.
This new tax treats all cars the same, regardless of their fuel efficiency, and charges drivers based on the wear and tear they put on the road.
Under the new program, called OReGO, drivers will only pay for the miles they drive.
“It’s a fair and sustainable way to fund road maintenance, preservation and improvements for all Oregonians,” according to a statement on the OReGO program website.
Oregon’s new pay-per-mile roads fee requires volunteers to install a device on their car that collects data on how much they drive.
Using OReGO, drivers will pay one-and-a-half cents per mile they drive. Then, drivers will receive a credit to offset the 30 cents per gallon gas taxes they pay at the pump.
The state is in the trial phases of this voluntary tax initiative and the transportation department has recruited 5,000 volunteer drivers to try the program.
Oregon aims to eventually replace gasoline gallon taxes with per-mile taxes.
“If you look at your water, power and other utility bills, you pay by how much you use. Transportation funding should operate the same way,” Art James, a volunteer in the program testified on the OReGO website.
Oregonians can use the OReGO calculator to discover if this new tax would save or cost them money. For example, a driver who drives 700 miles a month with a car that receives 25 miles per gallon would see a monthly increase of $2.10 with OReGO compared to the state gasoline tax.
“It’s not necessarily designed to save people money,” explained Michael Sargent, a research associate at The Heritage Foundation who specializes in transportation and infrastructure.
Rather, Oregon is trying out a new method to see if there is a better way to tax everybody who uses the road.
“Each state has their own unique needs and they should be able to experiment with ways to fund their own transportation systems free from burdensome federal mandates,” Sargent said.
While the new tax aims to implement a more equitable method of collecting taxpayer dollars for roads based on usage, it comes with some privacy and security concerns.
Two of the three devices that transportation department offers to drivers, made by Verizon and Azuga, are GPS systems and have the ability to track a car’s location and a driver’s exact movements. The third option, the ODOT Account Manager, only tracks miles driven and fuel consumed.