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Mileage tax program revs up

The nation’s first real test road usage fee will begin in Oregon on July 1 with 5,000 volunteers being charged 1.5 cents for every mile they drive.

“Nobody’s ever done this before, we’re building this system from scratch,” said Michelle Godfrey, public information officer for the Oregon Department of Transportation.

The program known as OReGO is not intended to replace the gas tax, as reported in some media outlets. Instead, Godfrey said it is about “modernization” of the system to ensure that fuel efficient and electric vehicles pay their “fair share” of highway maintenance.

“Federal funds are drying up (for transportation-related projects), construction costs are going up and, with more fuel efficient vehicles, there is less gas tax being paid to maintain roads,” she said.

Participants in the OReGo program will get credited the 30-cent per gallon state gas tax that they currently pay at the pump.

The way the program works, said Godfrey, is that volunteers will have a device mounted in the data port of cars and light-duty trucks. The device will track the miles they travel and then, based on the model of their vehicles, calculate the amount of fuel they use, which will be credited against the mileage fee.

“A lot of people will get a credit or, in some cases, even a refund,” said Godfrey. “If you are getting less than 20 miles per gallon then you are going to get money back.”

People are invited to compute what their OReGo charges would be versus what they would have paid in gas taxes at

Three private vendors have been chosen by ODOT to oversee the collection of mileage fees. Drivers can choose which entity they want to work with. Their options are: Azuga of Colorado Springs, Colo.; Sanef, part of Intelligent Mechatronic Systems from Canada and Verizon Telematics, based in Atlanta, Ga.

Godfrey said all three vendors plan to offer additional services to drivers who enroll in the OreGO program, which could help reduce their insurance rates or bring savings at the pump.

The Legislature required in its 2013 approval of the program that at least one vendor offer an option that does not rely on tracking by a Global Positional System. Sanef will provide this option, as well as calculate payments on ODOT’s behalf and deposit them in the state highway fund.

The devices that will be used to report mileage are already in use in Oregon and other states where insurance companies offer coverage based on travel distances and driver behaviors, according to state officials.

Godfrey said motorists who opt for a GPS device would one day in the near future be able to have mileage deducted for driving on private roads or traveling out of state.

She said drivers will be able to monitor their account online and most people will find that they are not paying more than the gas tax.

“That’s a real light bulb moment for most people,” she said. “It’s a lot more transparent way of paying for transportation.”

The driver of a car that is more fuel-efficient is likely to pay more in road usage charges, based on early ODOT tests.

The philosophy behind the gas tax is that those who use state roads would pay for their maintenance began to fail when people began opting for more fuel-efficient vehicles, according to Godfrey.

Information released by ODOT shows a reduction in fuel sales from more than 1.68 billion gallons in 2003 to about 1.62 billion in 2012.

The result of that decline is that only half a mile of roadway can now be built for the price paid to build a full mile in 1993, according to ODOT.

“The gas tax is going to become obsolete, this is meant to replace the funding that we’re losing,” said Godrey.

She said fuel-efficient vehicles still put wear and tear on roadways, so it is time to ensure their owners are also chipping in on maintenance and repairs.

She said the state has been studying the issue for 14 years and, in 2013, the Legislature gave ODOT the go-ahead to implement the program on a limited basis.

“The program is fully operational, we have built it as if we would have the entire state on board,” said Godfrey. “This is kind of a dress rehearsal; the idea is to be able to flip the switch and we’re ready to go.”

She said at the end of the year state officials will review data about how the program is working and then decide whether it should be modified or broadened.

“This process is probably going to evolve as the system evolves,” said Godfrey. “There is no sunset with this program, it goes into perpetuity unless a decision is made about where it will go.”

In 2001, the Oregon Legislature created the Road User Fee Task Force to investigation options for creating more revenue to pay for infrastructure upgrades. After gathering driver feedback through two pilot projects, Godfrey said the new program was created as an alternate way to pay for road maintenance.

“This evens the playing field,” she said.

People can access the OReGo website for more information.

Although Oregon will be the first to try out the mileage fee system, she said 12 other states, including California and Washington, are also giving strong consideration to the plan.

“We’re trying to educate people and get them interested enough to explore the program a bit and then sign up to volunteer,” said Godfrey.

If widely adopted, this will not be the only time Oregon has led the nation in implementing a new fee. Oregon was the first state to adopt a gasoline tax in 1919.

In addition to the state tax of 30 cents per gallon, motorists pay a federal tax of 18.4 cents per gallon that was last increased in 1993.


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