Three years ago, Oregon's Legislature encountered a problem: Funds available to maintain roads were deteriorating, yet maintenance costs were headed in the other direction.

The Legislature saw the beginnings of a potential road crisis, knowing that the well of available revenue earmarked for state highway repairs would soon dry up. To fund repairs, Oregon relies on the state gas tax, which costs drivers 24 cents for every gallon purchased.

This used to be a sufficient revenue stream for road maintenance, but the proliferation of fuel-efficient vehicles combined with the increasing popularity of hybrid-electric vehicles has created a gas-tax crunch that is not improving. This vehicular conundrum, though great for the environment, has become the bane of not only Oregon's road budget, but also of road budgets across the nation.

Oregon's Legislature passed House Bill 3946, mandating creation of the Road User Fee Task Force (RUFTF) to examine revenue sources for road maintenance. The RUFTF eventually hit on using GPS devices and wireless technologies to track the distance a car drives on state roads. Drivers would then pay a tax on the miles driven when they fill their gas tanks.

Oregon Department of Transportation (ODOT) consulting researchers spent more than 14 months developing the technological underpinnings for the mileage tax, and on May 14, 2004, the technology was demonstrated live for the first time to RUFTF members on the Oregon State University (OSU) campus in Corvallis.


In the Zone
The RUFTF enlisted the help of professors David Kim and David Porter of OSU, and after analyzing the situation, the researchers proposed a combined device for cars.

"One was GPS, for not only determining when a vehicle's inside the state or not, but also the number of miles," said James Whitty, manager of the ODOT Office of Innovative Partnerships and Alternative Funding, and administrator for RUFTF. "The second device was an odometer tag, which would count miles through contact with the speed sensor."

Whitty said GPS's ability to locate a vehicle in a particular zone -- one of which will determine state boundaries -- allows the state to know whether a vehicle is inside the state so miles driven outside the state are not included in the mileage fee. Smaller zones will be defined by a geographic area and a time period.

State and local policy-makers will determine smaller zones --downtown Portland between 4:00 p.m. and 6:00 p.m., for instance -- that include pricing strategies based on peak-period pricing in congestion areas.

Any legislation would have to grant local governments this authority, or if the Legislature prefers, the state could be granted this authority, he said, noting that it's highly unlikely the state would ever act without approval from the local government.

"Since the local gas tax initiatives are always sent to the voters for approval, and voters can demand a vote under a voter referral process anyway, as a practical matter, peak-period pricing will in most cases be put to a public vote," he said. "The Legislature could determine otherwise, but this is difficult to imagine happening in this state."

GPS devices aren't completely dependable at counting miles, he said, because tall buildings, weather, mountains and trees interfere with signal reception. This is where the odometer tag comes in.

"The tag would count miles, and then the GPS signal would help us determine which bucket to put the miles in," Whitty said. "Charging for miles driven out of state would be against [the mileage fee] policy directive. Thus, no fee would be applied to the miles placed in the out-of-state bucket."

Once a plan was in place, the RUFTF and OSU searched for devices to make it work, but found nothing on the market that would meet the state's needs. Researchers developed specifications for the necessary