Categories Navigation

Asset Publisher

Road Usage Fee Moves Forward in Oregon

On July 7, 2013, the Oregon State Legislature passed Senate Bill 810, establishing the nation's first road usage fee. SB 810 would create a voluntary program capped at 5,000 vehicles that would allow motorists to pay a per-mile road charge of 1.5 cents/mile in lieu of the state motor fuel tax (currently 30 cents/gallon). Participants may opt out of the program at any time.

The bill does not define a technology to collect the road usage fee, but directs the Oregon Department of Transportation (ODOT) to develop methods for recording and reporting the number of miles driven. The bill also requires ODOT to provide participants a range of options for reporting mileage. A December 2012 Government Accountability Office study classifies potential reporting strategies into three categories: prepaid manual systems, pay-at-the-pump systems, and GPS-based systems. The program's voluntary nature and range of mileage reporting options should help to address privacy concerns.

Oregon's experience with road user fees dates back over a decade. In 2001, the state legislature established the Road User Fee Task Force, which produced a report on alternative transportation revenue sources in 2003. The Task Force also launched two road user fee pilot programs, the first in 2006 and the second in 2012.

The gas tax has been the backbone of transportation finance at both the state and federal levels for decades. However, the gas tax has been stagnant or declining in recent years due to inflation and improvements to vehicle fuel economy. As a result, transportation policymakers have begun considering a range of alternative funding sources, including a motor fuel sales tax. In the near term, the GO TO 2040 comprehensive regional plan supports an eight-cent increase to the state gas tax, as well as an increase to the federal gas tax. In the long run, however, GO TO 2040 recognizes the need to replace the gas tax with some form of road usage fee. Road usage fees have many advantages: they are immune to vehicle technologies, can raise substantial revenues at low rates, and more accurately link drivers' use of the highway system to fees paid.

Oregon has been a trendsetter for transportation funding in the past -- it was the first state to impose a gas tax, at the rate of 1 cent per gallon in 1919. SB 810 could be a significant milestone in moving the nation toward more sustainable forms of transportation funding.