Oregon has awarded a contract to a private company called Sanef ITS to institute the country’s first roads-usage charging program. Electric vehicles are being called the catalyst for this new tax program.
Presently set up as a voluntary program, the idea is that instead of a gasoline tax to help pay for state infrastructure, drivers would instead pay a tax for each mile driven. Or, at some future point pay both. Sanef ITS spokesperson and President, François Gauthey, explained the need for motorists to pay per mile saying, “We are seeing a growing trend in the number of electric and hybrid vehicles on our roads, which has led to a significant fall in critical gas tax revenues being collected for road maintenance.” Even worse, but not mentioned by Gauthey, government pressure to increase fuel economy in passenger cars has had a profound effect on our conventional vehicles’ miles per gallon. For example, a model year 2015 Subaru sedan now achieves 41% better fuel economy compared to 1999 Subaru sedan the same size, with the same performance. This one-two punch to the gas tax revenue stream is the opening that many state leaders see to introduce a new form of revenue gathering.
The method by which the taxable miles are recorded is a small device that plugs into a car’s on-board diagnostics port (OBD). Of course driver’s can’t be trusted to report their miles, nor could the state simply tax drivers based on the miles recorded at their state vehicle inspection. One question is how will this device interact with other OBD devices such as those that monitor drivers’ behavior for insurance company usage?
The Oregon program starts July 1st, 2015. Motorist who opt in will pay 1.5 cents per mile up to 5,000 miles, and they will then receive a tax credit back against their gas tax payments. In its press release, the company did not say how this program actually benefits the state since it seems that residents will pay less tax. Also, EV drivers don’t pay any gas tax, so why would an EV user sign up since there is no rebate?
Many drivers in the US are skeptical of states claiming that the gasoline tax needs to be increased. Particularly those drivers that live in states where the gasoline tax is used not just for road repair and maintenance. Many states, such as Massachusetts, use the gas tax to finance other projects many drivers never use such as bus, train, and other mass transit programs.