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Oregon plans to introduce a tax on mileage

Wow, just wow

http://tech.slashdot.org/story/13/01/03/237258/oregon-lawmakers-propose-...

"Facing a $10 billion dollar revenue shortfall for transportation financing, the Oregon Legislature is expected to consider a bill to require drivers with a vehicle getting at least 55 miles per gallon of gasoline to pay a per-mile tax after 2015 to offset the loss in tax revenue for fuel efficient cars at the gas pump where the government has traditionally collected money to build and fix roads. Oregonians currently pay 30 cents per gallon, a tax that is automatically added at the pump but as cars become more fuel efficient and alternative fuel sources are identified, state officials project gas tax revenue will decline. 'Everybody uses the road, and if some pay and some don't, then that's an unfair situation that's got to be resolved,' says Jim Whitty of the Department of Transportation. Opponents of the Oregon proposal say it will hurt a new industry. 'It will be one more obstacle that the industry and auto dealers will face in convincing consumers to buy these new cars,' says Paul Cosgrove, a lobbyist for the Alliance of Automobile Manufacturers. Other states, such as Nevada and Washington, are also looking at a per-mile charge and a Washington law that would charge electric car owners an annual fee goes into effect in February. Oregon did a pilot study of the mileage tax (PDF) where participants paid 1.56 cents per mile and got a credit for any gasoline tax they paid at the pump. According to the study although initial media portrayals of the system were almost uniformly negative 91% of test participants preferred the mileage tax to paying gas taxes."

".... and everyone pays general taxes for sidewalks."

Yes, but it would be fairer if everyone who walked on sidewalks were charged by the mile, and people with wheel chairs more since all those ramps cost so much. Why should people who drive everywhere be unfairly taxed for sidewalks they never use!

(Reductio ad absurdum)

I have a feeling Oregon plans to tax a lot more than $100 a year. I imagine over time they will be taxing cars the same price they would have paid for gas. If the 1.5 cents/mile is true then it's more like 150-200 for the average driver.

+1 GTC (both posts)

GoTeslaChicago, walking produces no wear on sidewalks. Sidewalks wear out from seasonal cycling (frost heave) and weathering. Roads, on the other hand ARE worn by traffic, and the heavier the vehicle the worse it is. In Seattle they are starting to install concrete paved bus stops because the giant buses groove the payment so badly. To me, this is why buses- despite how PC they are- are inferior to trains. Trucks, buses, and large personal vehicles do damage the roads. So do studded snow tires. Roads in my state are paid for only by gas tax, so I don't think it is really fair that I use the road but don't pay for it.

Bike trails.... big waste of money. Very expensive, very few users.

Wheel chair ramps- federal law so we have no local control on that one.

Really, it's nice that WA is not charging me the usual 9.5% sales tax when I get my Model S next month, and that the Feds give me a rebate... to encourage electric drive. But at some point I dont want to keep asking for more subsidies, risks a backlash.

DTsea,

Is the argument about fairness?

"Everybody uses the road, and if some pay and some don't, then that's an unfair situation that's got to be resolved,"

I don't think so. If it was about fairness, what about when you buy gas for your ATV, lawnmower, motor boat, jet ski, snow mobile, chainsaw, portable generator etc. You're paying road taxes and don't use the road. If it about fairness, why not charge to use the sidewalks? And why tax other people who might never use them. There's a lot of "unfairness" in the world, why is there such urgency to solve this problem of "EV unfairness"?

Is it about revenue?

"Facing a $10 billion dollar revenue shortfall for transportation financing, the Oregon Legislature is expected to consider a bill...."

I don't think so. It will be years, maybe a decade before Oregon has 100,000 electric cars on the road.
Even if they pay 2 cents a mile times 15,000 miles a year that would only be $30 million. How does that close a 10 BILLION dollar shortfall?

Could it be the Oil Companies and others who don't like to see green initiatives gain ground are using the fairness argument to disguise their real intent?

You decide.

@DTsea - you appear to have a beef with cyclists. I am an avid road cyclist and do it for fitness. I ride about 150-200 miles per week. Whether I was a cyclist or not, I would still drive the same miles per year, which is about 12k. So I do pay my share of taxes via gasoline, same as all other ICE vehicle owners. Not sure why I SHOULD pay an additional tax because there is a bike lane. However, where I live, Evergreen, CO, there are no bicycle lanes, just standard road shoulders on about 75% of the roads. Share the Road (with EVs).

I'm from California and am no expert on the law affecting transportation revenues, but I support an equitably applied tax on the miles traveled by all vehicles as a reasonable means to fund highway improvements and maintenance. A VMT tax is a reasonable way for EVs to pay their fair share of necessary highway improvements and maintenance.

While I can’t argue with the possibile ulterior motives behind a VMT tax, or the mismanagement of tax dollars collected thereunder, I believe its time has come and EV proponents need not despair. Getting to a truly equitable tax scheme is a huge challenge. Its up to our friends in Oregon to look out for the "devil in the details." Here's a few reasons why I think we shouldn't through the VMT concept under the bus.

1. Fuel taxes typically aren’t commingled with the general fund. I understand the distrust shared by many of us in the ability of government to manage its fiscal resources efficiently and equitably. I do know that in California, transportation revenues are reasonably well-guarded, if not always well-used. California’s Constitution provides that fuel taxes (i.e., cents/gallon), weight fees, and certain vehicle fees are dedicated to road construction and maintenance, and for the operation of the California Highway Patrol and the Department of Motor Vehicles. California’s Constitution prohibits use of these revenues for general purposes. (California does cheat a little here by loaning transportation revenues to the state's General Fund, but those loans are being repaid). Now the sales tax on motor vehicle fuel (i.e., cents per dollar of fuel purchased) is separate from the fuel tax and is, therefore “fungible” with the state’s General Fund, just like sales tax on any other commodity. In California, however, the sales tax on gasoline is earmarked for mass transportation programs.
2. As fuel economy increases, traditional fuel taxes fall in proportion to the needs of the transportation system. In the 1950s and '60s, when California's surface transportation system experienced phenomenal growth, motor vehicle and fuel tax revenues met the needs of new construction without any significant increase in the tax rates because the revenue necessary to build the streets and roads increased as fuel consumption increased and fuel consumption per mile remained relatively constant.
3. Imposing a tax on vehicle-miles traveled (VMT) on all vehicles using th highway system is a reasonable alternative to traditional fuel taxes. Users of the highway system pay according to how much they use (how many miles they travel). Because heavy vehicles cause more wear and tear than passenger vehicles, an additional weight fee is already imposed on heavy vehicles in most (all?) states to offset their greater impact on the system.
4. A VMT-based tax is not antithetical to a carbon tax or state and federal clean air acts. In California the carbon tax is intended to offset or reduce greenhouse gas (GHG) emissions to reduce the adverse effects of global warming. California’s transportation fuel tax is intended to pay for necessary highway improvements and maintenance. Motor vehicle tailpipe emissions are addressed through state and federal performance standards affecting the composition of fuels and the efficiency of motor vehicle engines.

As far as I’m concerned, an equitably applied VMT tax is a fair way for EVs to pay their share for highway programs and it needn’t conflict with climate change or clean air policies. I suppose a hybrid system combining fuel and VMT taxes might be workable as a transitional solution. I'm certainly sympathetic to the privacy concerns mentioned in this thread but I think that can be worked out. Finding common ground on what is truly equitable is an exciting mystery to me. All I know is, I want smooth roads to drive my beautiful P85 on and it seems pretty obvious our current scheme of paying for road improvements isn't working!

This makes sense to me as a way of paying road use taxes. I think the added benefit is that if you are a tax revenue source for local government then you are a recognized group. That may provide some incentives to listen to our interests rather than just the oil/car dealers/ICE manufacturer lobbyists.

I recall reading a news article in the 198's stating at that time that NHTSA had found that an average semi, weighing aprox 70,000 lbs caused 30 to 40 million dollars road damage annually. At that time the trucking industry was complaining that they had to pay 7 to 8 thousand dollars a year in road and motor fuel tax to keep that truck on the road. Seems to me that it is time again to try to get those who are crumbling the roads to start paying for their fare share. The reason that politicians are coming after EV owners is that last year the trucking industry spend 27 billion in lobbying the politicians, and about 10% of that on actual road expense. As usual, the politicos have it wrong again.

"As fuel economy increases, traditional fuel taxes fall in proportion to the needs of the transportation system." True, but not the whole story.

The Federal gasoline tax hasn't been increased since 1993. It needs to be raised at least 33% to have the same purchasing power as it did in 1993.

Are we trying to blame more fuel efficient vehicles for a problem that has it's root causes elsewhere?

Dr Bob,

You may be on to something, but the numbers can't be right. Maybe $30,000 per truck, but not $30 million. There are approximately 1.6 million long haul truck drivers. So there are probably at least 1 million long haul trucks. If so, times $30 million per truck would be 30 trillion dollars of damages!

Edh, I understand you are in favor of taxing electric vehicles. Do you have any idea how much money you will raise and will it not cost significantly more to collect these taxes?

Any mileage-based tax will require either a device to track and report it or some kind of auditing, both are expensive propositions.
You don't tax something you want to encourage.
If you want people to adopt EVs, you charge them less, not more for driving them, otherwise there's no incentive to switch on a large scale.

I was in Denmark and was told that the cost of your annual car license depended on the car's gas consumption. They use something comparable to our EPA mileage. The worse the mileage, the higher the license fee.

Velo1, no beef with cyclists or with dedicated, safe, grade separated bike trails. I love to ride. My beef is with the mayor of seattle who (with our city streets disintegrating with potholes) is spending a lot of scarce street maintenance money on striping for bike lanes on the heaviest arterials, often with a dedicated bike lane running parallel already 50yards away. This encourages riding in traffic in our dark, wet city.

However, bike lanes are an amenity used by a small portion of the poulation, especially here in seattle because it is very hilly, wet, and dark. So, they make sense for heavily travelled routes (such as our long distance Burke Gilman Trail, funded as part of Parks) but DONT make sense when means of implementation is to turn one of the few four lane east west arterials we have into a two lane street.

EDH AL captured my thinking- gas taxes are a silly way to fund roads because as cars get more fuel efficient the revenues dont keep up for road maintenance, and as the marginal cost of driving drops people drive more. Heavier vehicles and more miles driven seem like a rational way to tax for roads, ifwe can figure out how to do it. By heavier i mean trucks and buses. Mileage tax would naturally pay for system expansion as demand rises.... Mobili is critical to economic health.

I have a better idea for them... Start charging higher lease prices for oil fields, and eliminate all tax subsidies for oil companies!!!! They would likely have their yearly state budget back in an hour.

TikiMan, that might work for states with oil fields, but the other states need road revenue too. I don't know of state tax subsidies for oil companies.

Our Tesla cars won't be much good without roads...

@Mel:
"I understand you are in favor of taxing electric vehicles. Do you have any idea how much money you will raise and will it not cost significantly more to collect these taxes?"

Thanks for the question. I don't favor taxation of EVs. I favor a fair allocation of the costs of road and highway maintenance (and expansion) to all users (ICEs, EVs and others) of our road and highway system. So, to the Oregon proposal, I would suggest a gradual replacement of the fuel tax with a taxation scheme based on vehicle miles traveled (VMT) by all vehicles using public roads and highways.

Such a taxation scheme could (and should, IMHO) also include a discount for technologies like EVs in proportion to the societal benefits derived from such technologies (e.g., clean air). The taxation scheme should also take into consideration the disproportionate impacts of heavy duty vehicles. A VMT-based tax might be higher for trucks than ICE cars and EVs would pay less than ICEs -- but not zero. Other road users, like school buses or police and emergency services vehicles, might also deserve special consideration. (FYI, school buses in California currently don't pay fuel taxes and I think that's quite appropriate).

How much money would be raised? An appropriate taxation scheme that is applied to all vehicles (not just EVs) would have to collect at least as much revenue as is collected by the current fuel tax.

How would authorities know how much to collect from vehicle owners? Year-end odometer readings subject to audits and reconciled at the time of sale of vehicles. I believe interstate trucking companies pretty much already adhere to such a system for the sake of apportioning fuel taxes among the various states they may operate in. Its undoubtedly bureaucratic but not impossible.

Finally, let me say for the record that, IMHO, the odds of any state imposing a VMT tax are infinitesimally small -- but I still like the idea.

DTsea,

It really doesn't matter, WE all pay extra for oil companies to live in the lap of luxury. The backward thinking of raising taxes on people who already pay a premium just to own an electric or alternative fuel vehical, sounds like an oil company ploy to destroy the technology before it has a chance to take over.

Taxes for roads can just be transfered to state sales tax, state income tax, or a combo of both (as it really should be, because everyone (regardless of lifestyle) needs the roads and freeways, if you use them or not).

The type of thinking, in this proposed bill, would be about the same as if the state gave insentives to criminals to commit more crimes, just to keep law inforcement and the courts from having to take a pay-cut, because newer crime-fighting technologies reduced the overall crime rates.

Highway pavement and bridge design is done based on truck traffic. the load of a car on the structural integrity of a bridge or rigid pavement is inconsequential. trucks case the structural damage to roads with usage. overweight trucks cause the most damage. car volume does indeed impact the # of lanes required for roads and can cause wearing on top coats of flexible pavement. and of course we all benefit from the ability to move people, goods and services efficiently across our country.
Taxes on the goods transported through a VAT or vehicle weight tax with some component from the general fund (as the roads benefit all) could be a fair mechanism to pay for roads... at somepoint before EVs become the dominant method car transport the gas tax needs to be supplemented but not replaced - the tax on gas should remain or go up IMO.. if a VMT tax were used then is should be on all cars not just efficient ones..

Year end odometer readings probably really wouldn't work in the long run but a nice temporary short term solution. I drive about 5000 miles a year in my state. My 12 year old car has 85K miles on it. The balance of those miles (25K) was driven in other states. The other states are going to find a way to tax me too. So then I will be paying taxes several times as I drive around the country.

It the long run if you want a tax per mile then you also will end up with a tracking GPS device.... or like everything in government everyone just pays for it in a graduating scale depending on you income or sales tax. Just like all other taxes.

In my opinion if you are agreeable to the tax per mile then you are also signing up for a tracker. I really don't care either way as long as the tax is fair.

@DTsea - thanks for clarifying. I get the Seattle 3-4 times per year, so hoped to see you Model S on the road.

It doesn't matter what is taxed. Most monies are misappropriated and not spent on what it was said to be for. as far as Denmark, with a 25% VAT in addition to 65% income tax, fuel and all cars are about 40% more than in the US. People who buy fuel are the ones who pay for roads. People who use public transportation do not. That's why gas is $8 a gallon in a lot of Europe.

drpeggau,

The Denmark markets, restaurants, stores, etc should charge an extra 30% tax for their patrons who don't own a car. Because, regardless if they don't use the roads, they still buy products that rely on those roads to get the products to the shelves.

Which is exactly why the freeways and roads need to be taxed just like the public schools (you still have to pay for them if you use them or not). Not based on use.

Either way, if I lived in Oregon, I would be preposing a per-child tax increase, so those who don't have children, don't have to pay for the public school system they don't use.

@TikiMan, part of the problem is trying to treat a tax like a fee. Fees are typically based on usage (e.g., bridge and highway tolls, parking meters, etc.), whereas taxes are based on ability to pay (progressive income tax rates) and/or treating people equally who are similarly situated (property taxes). Gasoline taxes are excise taxes, based on the purchase of each gallon of gasoline. Although the gasoline tax is intended as a surrogate for highway usage fees, it is imperfect: you don't have to use the highway at all, but you still pay the tax. Actually charging a fee for the use of highways is administratively (and politically) difficult. But charging people a tax for NOT buying gasoline sounds suspiciously like what the Supreme Court said was unconstitutional in its decision on the Affordable Care Act. (Note: the Court was opining on the powers of Congress, whereas this is the Oregon State Legislature, so that case does not apply).

Comments about bike paths are somewhat short sighted. Bike paths are not very expensive per mile (it varies a lot) and they produce many benefits. Not only do they make it safer for the cyclists, they reduce congestion on the road for drivers. They reduce gas imports just like EVs. An example of very expensive transportation programs that are used by a very small group of already very wealthy citizens, is the civil air system. I'm not even sure this is bad, just that it is easy to whine about any expense We are not consuming ourselves. Sometimes there is a general societal benefit. Are we all in this together or all in this alone?

+1 thumper

Reduce the efficiency of the electric motor to an equivalent 54mpg and pay nothing ;)

Robert,

Actually, that would be a good argument in a lawsuit! The EV owners in OR could just tell the judge that our cars don't use gas, thus we can not be judged by MPG rules.

The Model S is heavier than 90% of the cars we share the road with. We cause a lot more wear and tear than the typical Civic, and my full-size 2wd F150 Ford pickup is exactly the same weight as a Model S! We should pay our portion of road construction and maintenance. Right now this is funded through fuel taxes on most vehicles and excise taxes on heavy trucks. Our EV's currently live in loop-hole land and escape taxes in most places. Just as we all benefitted from tax-free Internet purchases, this too shall and must end. Amazon has agreed to begin collecting sales taxes most places, and we need to acknowledge our responsibility to pay for roads too. Be adults and stop expecting special treatment or acting all sanctimonious about driving green. No one owes us anything.


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