What Can We Learn from Oregon’s Mileage Tax Experiment?

A few weeks ago, the Obama Administration had a rather embarrassing public difference over the idea of a mileage tax to replace the gas tax. It’s certainly one of the most contentious notions out there, but most of the debate is based on hypotheticals. Now, as reported by Streetsblog Network member Worldchanging, the Oregon Department of Transportation has released the results of a 2006 experiment in a pay-at-the-pump mileage-based system, and we have some data to talk about. Adam Stein writes:

399353063_9c8e38b119_m.jpgPhoto by Entropyer via Flickr.

The Oregon Department of Transportation (ODOT) has compiled a 100-page report on the experiment that covers a lot of ground, but basically describes the trial as a roaring success. Note several features of this system:

  • Overhead is low. Because the mileage tax piggybacks on the existing gas tax collection system, it’s easy and cheap for the state to administer.
  • Payment is simple. From the driver’s perspective, the mileage tax differs little from the gas tax, other than the fact that their gas station receipts contain interesting information on miles driven.
  • Privacy is protected. The state only gets odometer information, not information about vehicle location.
  • Evasion is difficult. Even if you tamper with the GPS receiver, you’re still going to pay the gas tax.
  • Phased implementation is possible. Oregon doesn’t foresee a complete changeover to mileage taxes happening until 2040. This is a bit too slow for my taste (I really hope gas stations don’t exist in
    2040), but the point is that gas taxes and mileage taxes can happily coexist as the vehicle fleet turns over.

Technically, the system worked. Just as importantly, public acceptance was high. 91% of [self-selected] test participants preferred the system to paying gas taxes.… Before the experiment began, media portrayals of the system were almost uniformly negative — and inaccurate. By the middle of 2006, media coverage ranged from neutral to positive, and were far more accurate. Citizen comment
reflected this broader trend. ODOT concludes, “Effective communication can lead to public acceptance.”

Elsewhere around the network: Sustainable Savannah has a sheriff’s shocking defense of high-speed driving on rural roads; Twin Cities Streets for People links to a CNN report on the national mass transit crisis that uses Transportation for America’s excellent map of service cuts around the nation; and Trains for America notes that Japan is committed to staying out in front on high-speed rail.

  • Thanks for mentioning the Worldchanging post. Mileage taxes are an important topic — and the source of lot of misinformation. One clarification, though: Oregon released this study in November 2007. The information is not particularly new, but it is generally unknown to the public.

    There’s a massive disjunction between expert and lay opinion of mileage taxes (briefly, experts think they’re a worthwhile policy option, the public thinks they’re scary), which is part of the reason I’ve been writing about them recently.

  • Ian Turner

    What is the public policy justification for mileage taxes over gas taxes?

  • zach

    Some reasons this might be supported politically:

    1. People with less efficient (read larger) vehicles tend to have more political clout, and they are the ones who benefit with mileage over gas taxes.

    2. The average driver fears that his car is less efficient than the average car because he hears so much about efficient cars.

    3. Novelty. New kind of tax better than old one.

    4. Drivers think they’ll be able to figure out a way to outsmart it.

  • Mark

    This is a terrible, terrible, terrible idea and I’m angry that no one is pointing it out, especially activists. I would like the author of this article to try and convince me otherwise.

    “Privacy is protected. The state only gets odometer information, not information about vehicle location.” – If this is the case, why is someone who drives 100 miles in the city being taxed the same amount as someone driving 100 miles in the country, possibly even on private roads or off-road? It makes no sense.

    You have to motivate this as being BETTER than the current system for some physical reason. It WILL cost money to implement over the current gas tax or a higher gas tax. What are we getting for our money?

  • cw

    I think this post is a little inaccurate. Even here in Portland, the mileage tax is NOT popular. While the recent media coverage has become less outraged in the past year, the governor’s proposal to expand the pilot to a statewide program was met with fierce public resistance.

    The issue of the self-selecting population who elected to participate and then rated the program favorably is a huge issue here. Don’t get me wrong, I don’t have a car and take public transit or bike everywhere and am in favor of a mileage tax, but most people I talk to are not, even among the many progressive citizens of PDX. The public reception to the plan in the rest of the state (the Red part) is even worse. I think this is still a non-starter.

  • jmc

    A gas tax is so logical and requires absolutely no additional infrastructure. This is a waste of time.

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Relying on the gas tax instead of replacing it with mileage-based driving fees could cost Oregon $340 million over 10 years, according to the state DOT. Image: ODOT [PDF]

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