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Carl Molesworth

Could a Mileage Fee Replace Gas Taxes?
April 19, 2008

While we struggle to reduce congestion and create safer conditions on highways, efforts also are under way to find a more effective vehicle than the gas tax to pay for highway maintenance and construction. Once a viable source of highway funds, the gas tax has faltered in recent years due to a combination of rising fuel economy in our vehicles, flagging resolve in our political leaders and inflation.

Now, after a one-year pilot conducted in the Portland area with more than 280 volunteers, the Oregon Department of Transportation may have hit on a solution to this problem, and again technology is involved.

ODOT reports that a mileage fee could feasibly replace the gas tax as the principal revenue source for road funding, based on the findings of the test. The experimental program found that all of the major areas of concern could be properly addressed, including the requirement that the program be as seamless as possible for consumers. At the conclusion of the pilot, some 91 percent of the participants said they would agree to continue paying the mileage fee in lieu of the gas tax if the program were implemented statewide.

ODOT’s pilot program showed that the mileage fee could be paid at the pump, with minimal difference in process or administration for motorists, compared to how they pay the gas tax. Like the gas tax, collection of the mileage fee can be embedded within routine commercial transactions. By including the mileage fee in the fuel bill, cash or credit payments are accommodated, just like the gas tax.

The program also found that congestion pricing could be implemented (where different pricing zones are applied, based on congested areas and rush hours) and, at the same time, privacy can be protected because specific travel data is not stored or transmitted. ODOT conceded that many of the prototype components used in the pilot program did not, by definition, meet the standards of commercial products, but the next stage of technology development should take the technology to commercial viability.

Is a mileage fee the answer for the highway funding conundrum? Only time will tell, but I tip my hat to Oregon’s Road User Fee Task Force for giving it a test drive.

Until next time…

Posted by Carl Molesworth on April 19, 2008 | Comments (0)