Oregon Mileage Fee: Wave of the Future?
By Robert W. Poole, Jr.
The Reason Foundation, Surface Transportation Inovations, Issue 51-January 2008
One of the main conclusions of the TRB committee that I served on for two years, investigating the long-term viability of the motor fuel tax as the primary highway funding source, is that the fuel tax is unlikely to retain that status beyond mid-century. Indeed, our report urged state DOTs to aggressively explore and implement tolling and pricing alternatives, so that this country will have plenty of information on what works and doesn’t work by the time we have to make decisions on replacing fuel taxes.
One of the most promising alternatives is for all vehicles to pay electronically for each mile driven. Today’s electronic tolling, using transponders and gantries, works fine for limited-access roadways, where only a finite number of access points has to be equipped with the antennas and video cameras for tolling and enforcement. The most promising approach suggested thus far for charging for the use of all roads came from David Forkenbroak and Jon Kuhl. In A New Approach to Assessing Road User Charges (2002), they proposed a system using GPS to record miles driven on different categories of roads. Vehicle owners would periodically upload a summary of that information and authorize payment from their accounts.
In November, the Oregon DOT published the results of their one-year pilot test of a version of this concept. The report is Oregon’s Mileage Fee Concept and Road User Fee Pilot Program, and you can find it at: www.oregon.gov/ODOT/HWY/RUFPP/docs/RUFPP_finalreport.pdf. Everyone concerned with the future of highway funding should read this excellent report.
ODOT equipped the vehicles of 285 volunteers in the Portland area with on-board GPS units able to record and upload mileage records to gadgets attached to gas pumps at two Portland service stations. Gas stations were involved because the Oregon concept calls for a long phase-in period, during which existing vehicles would continue to pay gas taxes at the pump, and only new vehicles (with factory-installed GPS units) would pay mileage fees. Making the gas pump the collection point for all vehicles ensures that none fall between the cracks. The pilot program ran for a year, starting in April 2006.
Overall, the researchers concluded that the concept is viable, including paying the mileage fee at the pump. They judged the potential for evasion to be minimal and the cost of implementation and administration to be low.
Like Forkenbrock and Kuhl, they devoted considerable attention to the privacy issue, since reporters and poorly informed pundits have already shown a strong tendency to equate GPS with “tracking your vehicle” which equates to heavy-duty invasion of privacy. To begin with, like all other GPS receivers, these onboard units receive GPS signals; they do not send location data back to the satellites. There is no real-time “tracking.” Secondly, the Oregon system was designed from the outset such that:
No specific vehicle point location or trip data could be stored or transmitted;
All device communications from the vehicle unit was short-range only (i.e., to the gas pump);
The only data needed to assess mileage fees were vehicle ID, zone mileage totals, and the amount of fuel purchased.
Most users would want some such data to be stored, if only to enable them to challenge an apparently incorrect billing. So there will always be some degree of trade-off between privacy and information storage; the goal is to make this trade-off in a privacy-protecting manner.
The fact that the pilot program worked does not mean ODOT (or anyone else) has all the answers about how a statewide or nationwide shift from gas taxes to mileage fees would be carried out. Given the researchers’ conclusion that retrofitting this type of GPS unit to 200 million vehicles in the existing fleet is unworkable, then phased implementation is the only alternative, with existing vehicles continuing to pay the fuel tax while all new vehicles (by law or voluntary agreement) produced after a certain date come equipped with the GPS units. That means something like a 20-year transition period (since that’s about how long it takes for 95% or more of the fleet to turn over), during which old and new systems must operate side-by-side.
And there are all kinds of policy questions to be debated in the design of the system. Should all miles driven carry an equal charge? Or should this vary by type of road? Or by time of day and/or level of congestion? What happens to the current incentive to buy fuel-efficient vehicles if gas guzzlers and SMART cars pay the same rate per mile? What about rural drivers, who have to drive longer distances to get to the store than their urban cousins? Can privacy still be well-protected if the charging system gets more complex? What about electric cars that don’t ever visit the gas pumps? There are some good discussions of points like these in the report’s last chapter, but there will clearly need to be extensive debate and discussion before we can decide if and how to proceed with planning for such a momentous change in paying for highways.
I commend the Oregon legislature for authorizing this experiment, and ODOT for the superb job they’ve done in analyzing and reporting on it.