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Road User Fee Pilot Program
Frequently Asked Questions
Why is Oregon considering a road user fee anyway?
ODOT is researching a road user fee as a possible option to replacing the gas tax in the future because the state of Oregon is heavily dependent upon fuel tax revenues which is a declining revenue source. In 2004, 86 percent of all road revenue came from gas taxes. Our ability to pay for road repair, maintenance, and construction is at risk when gas tax revenues decline. The purchasing power of the state’s gas tax has steadily eroded over the years for several reasons:
  1. the gas tax has not kept pace with inflation;
  2. voters have opposed increases in the gas tax; and
  3. the fuel efficiency of new vehicles, especially hybrids and alternative-fuel vehicles, continues to increase, resulting in less gas tax paid.
Further improvement of automobile fuel efficiency will have a dramatic effect on gas tax revenues. This situation could accelerate if gas prices rise significantly.
Would a driver’s privacy be invaded by the mileage counting device placed in the vehicle?
No. The mileage-counting device in cars simply tells the odometer whether to count the miles as "in state" or "out of state." This is necessary to prevent Oregonians from being charged for miles driven outside the state. No location data is stored in the device or elsewhere; since vehicle location data is not collected, it cannot be accessed. The only data collected and transmitted is the mileage, sent to the gas pump reader through a radio frequency that can only travel about three to four feet.
Wouldn’t a mileage fee penalize people who drive fuel-efficient vehicles?
No. In fact, the mileage fee can be designed to reward and encourage the use of fuel-efficient vehicles. Studies show that all passenger vehicles do about the same amount of damage to the roads, however, they do varying amount of damage to the environment. Finding the balance between "user pays" for roads and taking into account environmental impact will be an issue for the legislature if the mileage fee is considered.
Why not simply raise the fuel tax on gasoline?
Oregon has been unable to garner support for raising the gas tax since 1991. Voters rejected the legislature’s attempt to raise the gas tax in 1999. As the buying power of road revenue declines, road usage continues to increase. Oregon’s steadily growing population over the past 20 years has created severe stress on the road system. A "user pays" approach appears to be the most fair and equitable way to collect revenue for road repair, maintenance, and construction.
Does taxing by the mile include a higher tax-per-mile for heavier vehicles?In other words, does the weight of the vehicle "weight" the tax?
No to both questions. In Oregon, heavy trucks are taxed by weight and miles, and that wouldn’t change. In the Road User Fee Pilot Project, passenger cars would pay a fee based only on the miles traveled in Oregon, regardless of weight. Here’s why: Oregon Highway Cost Allocation Studies have determined the difference in pavement damage imposed by a 6,000-pound large sport utility vehicle versus a 3,500-pound compact car is inconsequential as compared to the difference in the damage imposed by either of these vehicles versus a fully loaded, 80,000-pound truck. Although all passenger vehicles do the same about of damage to the roads, they do varying amounts of damage to the environment. Finding the balance between "user fees" for roads and environmental impact will be an issue for the legislature if the road user fee is considered. The rate could be weighted for variables such as emissions, fuel-efficiency, or other factors to encourage Oregonians to invest in purchasing environmentally-friendly vehicles.
Isn’t a "user pays" system what we already have?
The gas tax originally operated like a user fee. Prior to the 1970s, nearly all vehicles achieved the same approximate gas mileage, about ten miles per gallon. If a person drove more, they paid more for the additional burden placed on the road system. With the advent of more fuel efficient vehicles beginning in 1975, things changed. Some drivers paid much less than others did for use of the roads. Vehicle fuel efficiency increased from an average of 11.8 miles per gallon in 1970 to nearly 20 today. Fuel efficient vehicles now entering the marketplace will further increase the average miles per gallon. While beneficial from an environmental and energy conservation perspective—and something the state wants to encourage and reward—this severely hampers the ability to fund the maintenance, preservation, and modernization of our roads.
What would the rate be for a road user fee?
If a road user fee were to become law, the legislature would determine the per-mile rate. The rate could be flat, treating everyone the same or it could be varied to consider other state policies like environmental issues or urban/rural issues. Options might include charging a lower rate-per-mile for vehicles that achieve a certain level of fuel efficiency, for motorists that avoid rush hour zones, or for those making other environmentally friendly decisions. In the Road User Fee Pilot Program, a rate of 1.2 cents per mile will be used, which is equivalent to the current gas tax.
What is congestion pricing or "rush hour" zones?
As a mandate of the Federal Highway Administration’s Value Pricing Pilot Program—from which ODOT is receiving most of its funding for the Road User Fee Pilot Program—the state is required to test the ability to count separately miles traveled in congested areas during congested time periods. With a program like the Road User Fee, rates could be adjusted upward for vehicles traveling in these "rush hour" zones. The dollars raised from congestion pricing could be used to modernize roads within the areas in which they were generated.
How much is the Road User Fee Pilot Program costing taxpayers?
The Federal Highway Administration is funding the bulk of the project with a targeted grant of $2.1 million over six years. Oregon’s share is $771,000.
How would the service station know how many miles had been driven in Oregon?
Every passenger vehicle in the Pilot Program will be equipped with a counting device that tallies miles driven in Oregon between fuelings. When refueling, the mileage counter will communicate with tallying equipment placed at the pumps, and when the purchase is totaled, the gas tax will be deducted automatically and the mileage charge will be added automatically.
Why does Oregon have to be the first state to experiment with a new fee on mileage to replace the gas tax?
Historically, Oregon hasn’t shied away from solving tough issues just because there wasn’t another state model for comparison. In fact, Oregon was the first state to implement a gas tax in 1919 in order to pay for the building of the state’s first statewide public road system. Oregon’s traditional way of finding solutions is to face problems and work ahead of time to resolve them. That’s the purpose of testing a road user fee now.
How did Oregon come up with this idea?
Knowing that the fuel tax on gasoline is a declining revenue source for Oregon’s road system, the 2001 Legislative Assembly sought to address the long-term viability of Oregon road financing by the passage of House Bill 3946, mandating the formation of the Road User Fee Task Force (RUFTF). Oregon Governor John Kitzhaber, Speaker Mark Simmons, and Senate President Gene Derfler appointed members of RUFTF and the legislature charged the group: "To develop a design for revenue collection for Oregon’s roads and highways that will replace the current system for revenue collection."
What has RUFTF accomplished?
RUFTF members met nine times from Nov. 30 through Feb. 14, 2003, and held three public hearings. In addition, public testimony was accepted at several regular meetings. In March 2003, RUFTF presented a report to the 72nd Legislative Assembly outlining the possible alternatives to the current system. RUFTF considered more than 28 different funding mechanisms to replace the fuel tax on gasoline. As the task force reviewed options, they agreed on the following concepts:
  • User Pay System—any future revenue system should be a "user pay" system.
  • Acceptable to Public—a new revenue system must be acceptable to the public.
  • Transparent to the Public—a new revenue source should be visible to the taxpayers and not confusing.
  • Support Entire Public Highway and Road System—a new revenue mechanism should support the funding of the highway and road system for state, cities, and counties as the fuel tax does today.
  • Revenue Sufficiency—the sources comprising the new system must collectively have the ability to raise revenue sufficient to ultimately replace the fuel tax on gasoline as the primary revenue source for Oregon’s roads.
  • Minimal Non-Governmental Burden—a new revenue source should not impose substantial financial burdens on taxpayers or the private sector.
  • Enforceability—a new revenue source must be enforceable to ensure tax evasion is not substantial.
  • Non-Local Government Revenue Source—Revenue sources that are traditionally and primarily the province of local governments should not be usurped by the state.

How did the Road User Fee Task Force design the road user fee?
In designing a road user fee, the task force made the following policy recommendations:
  • Accuracy—the technology used should enable accurate fee calculation.
  • Reliability, Security, and Technological Feasibility—the technology used must be reliable, secure, and feasible.
  • Minimal Evasion Potential—the technology and administration mechanisms should allow minimal opportunities for evasion or fraud.
  • Not Count Mileage Outside of Oregon—a fee should not apply to mileage traveled by Oregonians outside the borders of Oregon.
  • Minimal Burden on Private Sector—the required capital expenditures and the costs of collection should minimally burden the private sector.
  • Retrofitting Affordability—any retrofitting of new technology into older vehicles should be affordable.
  • Seamless Transition—transition should be essentially seamless with no more than an incidental loss of gas tax revenue.
  • Privacy—Oregonians must be assured the technology used cannot violate the level of privacy expected by the public.
Did the Task Force come up with other recommendations?
Yes, as follows:
  • Restrict studded tire use. A permit system would generate revenue to cover costs of damage caused by studded tire usage.
  • Build new transportation routes faster and more cost-efficiently by tolling them. Unlike most states, Oregon currently has no toll roads and only two toll bridges. Research indicates that Oregonians support tolling only on new projects providing some transportation advantage not currently available. Experience elsewhere indicates the most likely candidate projects for tolling from an economic perspective are large bridges and highly traveled limited-access highways.
Even if the pilot program works, isn't it going to be really expensive to put on-vehicle devices in all cars in Oregon?
All of the technologies being used in the pilot program are already being manufactured in cars today. Car companies are already announcing that key components will be standard equipment on all models within the next few years. Federal Highways and standards organizations are working to adopt universal standards for the same technologies being used in the pilot. Therefore, it is very likely, in the not too distant future additional hardware would not need to be installed in vehicles, but a software upgrade would likely be necessary.