TRANSPORTATION:

In Ore., Big Brother wants a GPS

Anticipating a drop in state revenues due to higher fuel-efficiency standards, Oregon wants to equip all new vehicles with a GPS that will calculate a per-mile tax at the gas pump.

The tax, which would only be based on miles driven within the state, would replace Oregon's gas tax. As a per-gallon fee, the gas tax can fluctuate depending on gasoline use -- while a per-mile charge would presumably stay constant, even if alternative-fuel vehicles and conventional cars improve their mileage.

"Becoming less dependent on oil, especially foreign oil, is a good thing," Gov. Ted Kulongoski (D) told the state Assembly in November, when he unveiled his proposal. "But the fact is: Less money spent on gasoline -- as cars become more efficient and more people purchase alternative energy vehicles -- means less gas tax revenue."

The plan could go into effect within the next four to eight years, state officials say. The state gets 80 percent of its transportation funding from the gas tax, which is set at 24 cents per gallon. State-commissioned reports have estimated that rising fuel efficiency standards could render the tax inadequate for funding infrastructure projects as early as 2015.

Raising the 24-cent-per-gallon gas tax is politically out of the question, state officials say. It hasn't been increased since 1993, and it's especially difficult to sell when gas prices are volatile.

Now, Kulongoski has brought the mileage tax into the political arena by including it in his 2009-11 budget, which proposes $5 million per year for more research.

Privacy concerns and rural worries

Kulongoski has hit on transportation infrastructure as a lever out of the current economic slump, proposing the sector as one of only three areas to receive increased spending this year (the others are health and education).

Other driving-related policy proposals in his budget include: an extension of tax credits for drivers who use "pay-as-you-drive" car insurance, a reduction in first-time title fees for cars that get more than 30 mpg, and a congestion pricing pilot project.

He also has pitched the development of a least-cost planning model for the state Transportation Department to use when deciding whether to build more roads or mass transit. To ease the financial strain on far-flung rural communities, he also proposed exempting rural residents from state efforts to reduce vehicle miles traveled (VMT).

But the budget will likely face a fight in the state Senate, where Republicans are hostile to the mileage proposal.

"I think most of our members are pretty leery of the idea," said Senate Republican Office spokesman Michael Gay.

He cited privacy concerns and the tax's disproportionate effect on rural residents. "It's an urban-centric solution that might not have the same effect out in rural Oregon," he said.

'False notions' holding back progress

James Whitty, manager of the state Transportation Department's Office of Innovative Partnerships and Alternative Funding, said fears of civil liberties being trampled are overblown. The GPS devices will not send out any information other than pure mileage figures, which it will share only at the gas station, he said.

The in-car devices will have the coordinates of the state's borders, so they can calculate when a driver leaves the state, but other than that the only data that will be collected are mileage statistics.

"We have to have political acceptance by the people, and they're hearing about it, unfortunately, in ways that indicate a lack of understanding," Whitty said. "There's a lot of false notions hampering understanding. We think we can protect privacy, but people are assuming it's going to be a tracking device, and we've worked very hard to avoid that."

As for the tax's potential regressiveness, Whitty pointed out that the gas tax already puts rural drivers at a disadvantage, especially since they tend to use heavier vehicles.

"They use gas and diesel now, which is basically a per-mile charge that varies per vehicle," he said. "To say it would negatively impact rural voters when the mileage tax is intended to replace gas tax shows they're jumping to a conclusion that hasn't been determined yet."

A trial run of 285 cars that ended in 2007 used a flat rate of 1.2 cents per mile, to match up with the gas tax of 24 cents per gallon and the average fuel efficiency of 20 miles per gallon, but Whitty said that's not likely to be the rate, once the mileage tax is implemented, since it doesn't distinguish between cars of varying efficiencies. "A rate structure can be developed that does any number of things, including disadvantage fuel-inefficient vehicles," he said.

Another payment mechanism will likely be necessary for drivers of alternative-fuel vehicles, including biodiesel, natural gas and electric, he said.

Other states that are interested in or pursuing mileage taxes include Colorado, Florida, Hawaii, Minnesota, Ohio and Pennsylvania. And pressure is building on the federal level, as well, with the Transportation Department recommending user fees as a way to replenish the federal Highway Trust Fund. A tri-state transportation commission representing Oregon, Washington and California is also sending letters to the states' U.S. representatives this week asking Congress to move forward on mileage fee development, Whitty said.

The plan got decent marks from environmentalists, who emphasized that their support would depend on whether the tax rate encouraged fuel efficiency.

"From an environmental perspective, we of course want to keep in place good, strong signals for people to buy energy efficient vehicles," said Chris Hagerbaumer, deputy director of the Oregon Environmental Council. "If this was to happen overnight, we'd say the fee should still incorporate something about the fuel efficiency of the car. You could vary the fee based on characteristics; it could be a little higher for gas guzzlers and lower for gas sippers."

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