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News arrow News arrow Local News arrow State gas tax could be replaced by mileage tax

State gas tax could be replaced by mileage tax Print E-mail
Written by Jane Stebbins, Pilot staff writer   
October 25, 2013 11:37 pm

Drivers of fuel-efficient vehicles will soon be paying what state officials believe is their fair share of gasoline excise taxes, when the Vehicle-Miles Traveled (VMT) program goes into effect in 2015.

The bill addresses an issue officials throughout the United States have been discussing in recent years as states try to preempt an anticipated decline in gas-tax revenue as cars are built to get better gas mileage and consumers increasingly switch to alternative energy to fuel them.

Originally, SB 810 was proposed as a new tax, but that would have required a super-majority vote at the state Legislature to move ahead. Its sponsor, Sen. Bill Hansell, R-Athena, decided to make the program voluntary, instead.

“You will find if you speak to the electric-vehicle owner, they get it,” said Shelley Snow, spokeswoman for the state Department of Transportation’s Development office. “They realize they are using the roads without contributing to the maintenance and operations of them.”

State officials have been testing for years various programs that could be used to recoup these anticipated tax revenue losses, and have now determined that the VMT plan could be the best way to go.

How it works

Signed by Gov. John Kitzhaber Aug. 14, the VMT program will solicit 5,000 drivers to voluntarily participate in a program whereby they would no longer pay the 30-cent per gallon gasoline excise tax currently assessed at the pump, but agree to pay a 1.5-cent per mile fee instead.

Mileage would be determined by an on-board unit that calculates the mileage one drives. That information is sent to the private wireless company of the driver’s choice — “People want and need choice,” Snow said — to determine if the state sends the driver a bill or a check.

Such on-board units are already offered by insurance companies for “pay as you drive” insurance, Snow said. And many firms — particularly in the trucking industry — install on-board units to track their company vehicles.

“Those are increasingly popular, particularly for people who don’t drive 5,000 miles a month,” Snow said. “The computer is already in the car — and that was critical in the pilot project. It has to be seamless.”

So, a high-efficiency car that gets 50 miles per gallon, for example, would take three gallons of fuel to get to Medford, about 150 miles. That driver currently pays 90 cents tax for that fuel. Under the new program, the driver would pay $4.50 in VMT taxes, minus the 90 cents for the current fuel tax, for a net payment of $3.60.

A gas guzzling truck, on the other hand — taking the same route but only getting 10 mpg — would require 15 gallons of fuel and the driver currently pays $4.50 in taxes — the same amount as under the VMT program.

Transportation officials realize it might not be easy to get the owners of the gas-guzzling machines to sign up for the program, but that’s where a two-tier payment program — fuel-inefficient cars sticking to the current system and gas sippers going to the VMT fee program — could come into play.

“That’s also why we have until July 1, to work on all the particulars,” Snow said. “And (the program’s) not required. But we want to be wide open on how we do it, see what the market says, see what technology’s out there.”

The 44 participants in the study that concluded in February indicated they liked the program, she said.

“The people said it was fantastic,” Snow said. “It worked beautifully; they liked that they didn’t have to mess with anything — they didn’t even know it was there. Now it’s the next big step: putting it into practice.”

 

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