Gas tax revenue is critical to Oregon's road upkeep since the funds generally make up 60 percent to 70 percent -- depending on federal contributions -- of the DOT's $967 million annual road maintenance budget.
Some legislators say changing the standard gas tax to a road-user fee is necessary because gas taxes generate less revenue as vehicles become more fuel-efficient and road-upkeep costs continue to escalate. But the suggestion of implementing a GPS-based road-user fee program -- lauded as trailblazing by some -- unleashed a flood of criticism from individuals and groups fearing the effort would facilitate an Orwellian human-tracking system.
Advanced Preparation
On Nov. 30, 2001, Oregon State Sen.Bruce Starr introduced legislation establishing the Road User Fee Task Force. The task force, headed by attorney Jim Whitty, discussed how the state could recoup gas tax funds it feared would soon decline.
Whitty said Oregon has not raised its 24 cent per gallon gas tax since 1991. As cars become more fuel efficient -- diminishing gas tax revenue -- and the costs of raw materials and labor rise, DOT officials fear they may not be able to maintain state roadways.
Researchers say high-mileage fuel cell engines may begin appearing in American vehicles within the decade.
"We've done some economic research, and we anticipate the gas tax will flatten in 2013 and permanently drop off in 2014," Whitty said. "We don't want to be hurt by what's going to happen. The roads still have to be paid for."
Raising Road Revenue
Oregon considered 28 different revenue raising mechanisms, explained Whitty. "We settled on the most critical broad-based mechanism: a vehicle miles traveled [VMT] fee."
Such a fee would tax drivers on each mile traveled in the state. At first, the task force toyed with the idea of simply checking residents' odometers every two years or so, but dismissed the plan as too costly.
After much consideration, the group realized "there's technology than can operate like an electronic odometer," said Whitty. "That's where GPS came in."
The task force's final report suggested testing two different mileage tracking systems: one involving an "odometer tag," the other relying on a GPS device.
For more than a year, David Porter and David Kim, two professors at Oregon State University, have been developing a prototype GPS mileage-data unit and an odometer-based mileage collection system.
The wallet-sized GPS device would be mounted inside a vehicle's engine compartment or under the dashboard. The system also requires an antenna for receiving information from GPS satellites and transmitting mileage data to readers at gas stations.
The readers would electronically pull miles-traveled information from drivers' GPS units or odometer tags, apply the proposed 1.25 cent per mile tax and add that amount directly to their gasoline purchase.
Too Much Information?
Whitty said he thinks most Oregon residents see the need for road maintenance. Whether they're ready to embrace the technology needed to implement the system may be another matter. From the moment GPS technology was mentioned in connection with a road-user tax, a variety of privacy groups have been crying foul.
Critics raised concerns: Can on-board GPS units act as human tracking devices? Will the technology result in some sort of surreptitious Big Brother scenario?
Both Porter and Kim say privacy concerns surrounding the GPS-based plan are unfounded. The GPS they are developing only will be capable of receiving and recording information from GPS satellites, according to Porter, not storing or transmitting individual travel routes or data to some government databank.
"I know because of what you see on TV and in movies, people think just that they have a GPS receiver makes them susceptible to being tracked by whomever," said Porter. "But there is absolutely no way."
Kim seconds that assertion. "One of our requirements for this device is that it cannot store location-point data other than what it needs to estimate the mileage a vehicle is traveling," he said.
"I don't think it's going to be that noticeable," Kim said.
The device is still in the development phase and many questions have yet to be answered. Researchers are not sure if placing the GPS device in a moving vehicle or Oregon's mountainous terrain and rainy weather will affect its accuracy.
Practical Difficulties
It also is possible the Oregon DOT will decide not to gather its road-user information via the GPS-based scheme, opting instead for the odometer tag units.
"Mileage collection would be based on current odometer technology," said Kim. "That's basically getting some information off a speed sensor, whatever type is equipped on the vehicle."
One problem is the odometer-based information collection system, which would require a series of border beacons at all major border crossings. The beacons would turn the units off as Oregon drivers crossed onto out-of-state roads and turn them back on upon re-entry.
The cost of the infrastructure required for border beacons might make that option cost-prohibitive, and GPS could be more favorable since using the government-owned GPS is free.
Either system, however, would require installation of readers at each of Oregon's 1,800 gas stations.
"It's not clear at this point how to deal with the phase-in of all service stations, but we are at a learning phase to examine the effectiveness of the technology being proposed," Kim said.
Service station owners could be required to pick up the tab -- as they do now for other station requirements, such as environmental protections. Whitty said the readers would cost $2,000 to $3,000.
Out-of-state vehicles, vehicles without the new devices or vehicles containing devices that have been tampered with would simply pay the mandated gasoline tax, which Whitty said is roughly equivalent to the 1.25 cent per mile rate.
Nothing is set in stone concerning the new taxing scheme, Kim said, and much has yet to be determined.
Footing the Bill
When the mileage fee is enacted, the Oregon Legislature would decide exactly who is going to pay for the needed infrastructure. Whitty said the Oregon DOT could pay infrastructure costs out of the state highway fund, or the capital cost recovery could be built into the rate for the new mileage fee.
Whitty said the task force will likely recommend the Oregon DOT pay infrastructure costs with a corresponding rate increase for cost recovery for a period of years. Under such a scenario, the capital investment would probably be bonded.
The odometer tags or GPS gadgets themselves are expected to run about $150 each and will be installed by auto manufacturers who would pass that price on to consumers.
Because retrofitting older vehicles could prove costly to consumers, the Road User Fee Task Force recommended the devices only be required on new cars.
The state is willing to wait the 15 to 20 years it would take to reach complete compliance, according to Whitty. Until then, Oregon will simply maintain two taxing programs.
To accommodate out-of-state drivers, some type of gasoline tax is likely to remain in place indefinitely, "or at least until all of the country were to change to a GPS-based system," Whitty said.
That may seem far-fetched, but the possibility of more states adopting programs similar to what has been proposed in Oregon is not as implausible as it initially seems.
Researchers at the University of Minnesota recently completed a report assessing road-user charges using GIS and GPS technology. The report was part of a two-year study funded by the Federal Highway Administration and a consortium of 15 states including Minnesota, Iowa, Michigan, California, Kansas, North Carolina, Texas, Wisconsin and Washington.
The study notes the problems now inherent with a motor fuel tax and states, "Quite clearly a new means for assessing road-user charges is needed."
It is likely road-user fees and GPS will travel together at some point in the not-so-distant future because the GPS-based plan opens up the possibility of a new type of road revenue known as a "congestion tax."
Congestion tax involves an added fee for drivers who use designated highly traveled roadways during peak hours.
Congestion taxes are already in effect in several European countries including Portugal, Spain, France, Italy and Switzerland. Other countries, including Germany and the UK, are soon expected to follow their lead.
Hoping to have its road-user tax well established before the drop-off in gas tax revenue, Oregon will begin a pilot test in spring 2004 involving the vehicles of 400 volunteers equipped with either the GPS-based or odometer tag systems. The test will run for two years.
Members of the Road User Fee Task Force hope the pilot will not only demonstrate the feasibility of their innovative tax plan, but also help allay some of Oregon drivers' fears and confusion.
"Then we'll have the operational data, and then we'll be able to talk about it to the public with more certainty," Whitty said. "We can ask the people involved, 'Were you concerned about your privacy at all? How easy was it to pay? How complicated was this?'
"That might just take a lot of the fear out of this," he said. "We think it will."
