Transportation — ODOT will conduct nation's first test of road usage charge based on mileage driven as an alternative to gas tax

Three private vendors have been chosen by the Oregon Department of Transportation to manage accounts and collect fees in the nation’s first real test of a road usage charge based on mileage driven.

Oregon’s program will start July 1, when 5,000 owners of cars and light-duty trucks will enroll voluntarily in a program billed as an alternative to gasoline taxes.

The vendors are Azuga of Colorado Springs, Canada-based Sanef and Verizon Telematics of Atlanta.

The announcement last week was timed to coincide with a transportation financing conference in Portland by the International Bridge, Tunnel and Turnpike Association.

“Oregon is not alone in this endeavor,” said Jim Whitty, an ODOT manager who has been working on the road usage fee since 2001.

“We are the first, but other states are studying this deeply. We are showing everyone what can happen with the future of transportation financing in the United States.”

The program is known as OReGO. Drivers who enroll will pay 1.5 cents for every mile driven on Oregon roads, minus any fuel taxes paid. ODOT will not supply the measuring devices or collect the taxes. Instead, drivers will pick a vendor that will supply a device and bill them for charges based on mileage reported, offset by fuel taxes already paid.

The money will go into the state highway fund, just as fuel taxes already are earmarked for the fund. It assumes that newer vehicles — particularly hybrids and electric cars, which use little or no fuel — will be paying for highway wear-and-tear that they otherwise wouldn’t be because of their lack of fuel taxes.

The break point for a vehicle is estimated at 20 miles per gallon. The driver of a car that is more fuel-efficient is likely to pay more in road usage charges, based on earlier tests.

This program is the outgrowth of two previous pilot projects conducted by ODOT, and was approved by lawmakers two years ago, starting July 1.

Paying a fair share

Robert Siegel, speaking for Verizon Telematics, said measuring devices already are in use in Oregon and other states at the request of insurance companies offering coverage based on mileage and driver behaviors.

Under the terms of the 2013 legislation, at least one vendor must offer an option that does not rely on GPS tracking. This option will be offered by Sanef, which also will tally payments on ODOT’s behalf and deposit them in the state highway fund.

Ben Miners, who spoke for Sanef, said the technology fits in with newer cars equipped as “connective vehicles.”

All three vendors plan to offer additional services to drivers who enroll for the OReGo program.

Nate Bryer, a vice president of Azuga, likened it to the use of health behavior trackers on smartphones.

“What we want to do is to allow customers who participate in the program to have complementary services … where we can bring to light your driving behaviors,” he said. “When you see what your behaviors look like, you can take action that equates to savings on insurance or at the pump.”

Oregon was the first state to institute a gasoline tax back in 1919. The state tax now is 30 cents per gallon and took effect in 2011; the federal tax is 18.4 cents per gallon. It was most recently increased in 1993.

The 2015 Legislature is considering an increase, with proceeds targeted at road and bridge work, but it’s been caught up in a political crossfire. Congress is in a similar stalemate on a federal increase, even though lawmakers have had to bail out the federal highway fund.

Whitty said fuel taxes have been based on the user-pays principle, adding “that philosophy is beginning to crumble because we have fuel-efficient vehicles that are no longer paying their fair share of our road system.”

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