oregon’s road user fee pilot program presented to neact lagrande, oregon august 4, 2005 james...

Oregon’s Road User Fee Pilot Program

Presented toNEACT

LaGrande, OregonAugust 4, 2005

James Whitty, ManagerOffice of Innovative Partnerships and

Alternative Funding

Road User Fee Task Force

Legislative Mandate:

“To develop a design for revenue collection for Oregon’s roads and highways that will replace the current system for revenue collection.”

Oregon Road Revenue Sources FY 2005(bonding excluded)

State Fuel Taxes36%

Federal Fuel Taxes24%

Vehicle Reg & Title 11%

Weight-Mile Tax20%

State Other Funds6%

Federal Other Funds3%

Source: 2005-2007 Governor's Recommended Budget

Effect of New Technology Vehicles on Highway Fund Revenue

LIGHT VEHICLE FUEL TAX REVENUE

350

400

450

500

550

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Fiscal Year

$ M

illio

ns

Revenue Without MPG Improvement Small Fuel Economy Increase

Medium Fuel Economy Increase Large Fuel Economy Increase

Conclusion

In the future,gas tax revenue

will not bethe primary source

for funding our roads.

• A per-mile charge based on Vehicle Miles Traveled (VMT) within a state

• Replaces fuel tax for participating motorists

A Solution: The Mileage Fee

Policy Requirements

Affordable…...............................

System is accurate and reliable..

Differentiation of boundaries......

Technology

Feasible.............................. Reliable……………….……. Secure…………………..…..

Protects privacy of motorists…….

Minimal evasion potential………...

Minimal burden on private sector..

Seamless transition………………

Collection Possibilities

• Human Data Gathering

• Centralized Electronic Collection

• Toll way-Style Collection

Oregon’s

Mileage Fee Concept

A per-mile charge based on miles driven within Oregon by zone.

Zone 1 = in state

Zone 2 = out of state

Optional

Zone 3 = rush hour

The Concept

How it Works

On-Vehicle Device

mileage reader

Gas to GoCommercial Rd., OR

May 15, 2006 – 8:00 AM

13.5gal @ 205.5 27.74State tax disc. (3.24)Net fuel 24.50

Mileage fee243.3 @ 1.22 2.96

Total Due 27.46

FLEET XXXX3024 27.46

THANK YOU

1 2 3 4

One way signal receivedby car to switch mileagecounter between in-stateand out-of-state zones.

Mileage totals counted forin-state and out-of-state.

No location information is recorded.

Mileage read wirelessly at fueling stations.

Gas tax deducted fromgas purchase price

(24 cents/gallon) andmileage fee added.

• Fuel tax maintained for non-equipped vehicles

• Mileage fee integrates with fuel tax collection system

• Oregon’s weight-mile tax retained for heavy trucks

• Also testing “rush hour” pricing

How it Works

• No vehicle location data stored in vehicle

• No data transferred except mileage totals within zones

• Data transferred only at time of fueling via short range radio frequency

Privacy

Vehicles

• No retrofitting

• Components installed during vehicle manufacture

Service Stations

• Capital costs (Oregon): $33 million

• Annual operating costs (Oregon): $1.6 million

Cost

Less risky – • Bulk of revenue stream

remains at distributor level (fewer taxpayers)

• Mileage fee gradually becomes predominant

System Integration

• Retain current multi-state anti-evasion processes

• Fuel tax retained as redundant system to guard against system failure and tampering

May 14, 2004

Public Demonstration of Mileage Fee TechnologyOregon State University

Corvallis, Oregon

• Zone switching … Successful • VMT data transmission … Successful• Electronic calculation of fee … Successful• Gas tax deducted … Successful• Receipt presented … Successful

Policy Requirements - All Met!

Affordable…...............................

System is accurate and reliable....

Differentiation of boundaries.....

TechnologyFeasible..............................Reliable……………………..Secure………………………

Protects privacy of motorists………

Minimal evasion potential………….

Minimal burden on private sector…

Seamless transition…………………

1. Retrofitting cost versus long phase-in

2. Setting the mileage fee rate

3. Requirements on vehicle manufacturers and fuel distribution industry

4. Interstate system standardization and revenue allocation

5. Integration with federal solution

Policy Issues Remaining

Oregon’s Pilot ProgramTime Line: March 2006 – March 2007

Pre-Pilot: 20-vehicle preliminary control start

Full Pilot: 280 vehicles from one community paying mileage fee in lieu of gas tax; service stations with integrated point-

of-sale systems

Rush Hour: Some pilot volunteers participating in Rush Hour Pricing Group

RUFTF Websitewww.oregon.gov/ODOT/HWY/OIPP/ruftf.shtml