Should drivers be charged for every mile driven?

More fuel efficient cars means less gas is pumped, which means less gas tax is collected and even less cash on hand for states to repair roads and bridges. As a solution, Oregon is moving forward on a new idea -- a tax based on the number of miles driven as a supplement to the fuel tax.


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RICK KARR: Portland, Ore., is at the vanguard of the war to reduce gasoline consumption. You can find evidence all over its downtown area ... and at its car dealerships.

EARL BLUMENAUER: We're looking at hybrids, plug-in hybrids, electric cars.  There's some hyper-efficient diesel engines in the works.

RICK KARR:  Oregon Representative Earl Blumenauer’s constituents have been more enthusiastic buyers of green cars than people anywhere else in the country -- but drivers across the U.S. are catching up. And over the next twelve years, EVERY new car will become more fuel efficient thanks to an agreement that President Obama struck with thirteen automakers, including Detroit’s Big Three:

PRESIDENT OBAMA: The companies here today have endorsed our plan to continue increasing the mileage on their cars and trucks over the next 15 years.

RICK KARR:  Mileage targets for passenger cars will increase by two-thirds -- from about 30 miles per gallon this year ... to nearly 55 MPG in 2025. Which means Americans will be able to keep cutting back on their purchases at the pump. And that’s where the bad news in this story starts…

By definition, more efficient cars use less gas. If drivers buy less gas, state and federal governments collect less in gas taxes. But those gas taxes – a federal tax of about 18 cents per gallon and state taxes that range from eight cents to more than fifty cents a gallon – are what covers the cost of maintaining highways and bridges across the country.

And that’s already a huge problem -- take the example of the news that broke in May, when an Interstate Five bridge collapsed just a couple hundred miles north of Portland. By next year, the federal highway trust fund -- the source of almost all of the funding for bridges and roads that comes from Washington -- will go bust.

EARL BLUMENAUER: The bottom line is that we're in a downward spiral.  What it means is the federal government is not going to be able to able to help states and localities maintain what they've got.  It means that people will pay with less safe driving conditions.

RICK KARR:  does the gas tax generate enough revenue for the state of Oregon to maintain its roads properly?

VICKI BERGER: No.  Just plain no.

RICK KARR: Vicki Berger is a Republican member of the Oregon house. She says ... as the state’s residents buy even more efficient cars -- and less gas -- the budget crunch is only going to get worse. But she thinks there may be a solution: instead of having Oregon motorists pay a thirty cent state tax on every GALLON of gas they buy, have them pay a fee of a penny or two for every mile they drive. It’s known as a Vehicle Miles Traveled or VMT fee. Oregon was the first state in the union to impose a gas tax nearly a century ago ... and in two thousand six it set up an experiment to see whether it might be able to lead the nation again.

300 volunteers let the state hook up computers and transmitters to their cars, so that their mileage in Oregon could be tracked with a GPS, global positioning system.

The technology worked pretty well. But civil libertarians and privacy advocates said the GPS was a way for Big Brother to snoop on drivers. So the legislators in Oregon’s state house decided the whole idea was political poison, and for five years, it faded from view.

Until the Oregon Department of Transportation ran a new experiment late last year. This time, participants had a range of choices. They could let their smartphones track their movements ... install GPS units that sent data to a private firm instead of the government ... or use a device that recorded only how many miles they drove, but not where they drove. That’s what Vicki Berger chose for her car. Every month the unit transmitted her mileage count to the state DOT, which then sent her an invoice.

VICKI BERGER:  From a tax policy point of view, this was really interesting to me because when I go to the pump, I am filling my car with gas.  I'm not thinking about the taxes I'm paying.  And I'm paying both federal and state. When you get a bill in the mail, you think about the taxes that you're paying. And that does sort of awaken this sense of, "Oh, I'm paying a tax here for the privilege of using the roads."  Which I don't think people think about when they just fill their tank.

RICK KARR:  But skeptics think administering a program like that would create a bureaucratic mess. And they say taxing fuel-efficient cars sends an anti-green message, charging hybrids more than Hummers.

KARI CHISHOLM: We are reducing the incentive for people to shift to fuel efficient cars. 

RICK KARR:  Kari Chisholm is a Democratic political consultant and blogger based in Portland.

KARI CHISHOLM: Gas tax is a great incentive to get folks into fuel efficient cars, to put less carbon in the atmosphere.  By going into a tax that hits-- plug-ins and electrics and high-- high-mileage cars, we’re reducing that incentive.

RICK KARR: But what do we do?  I mean, the national highway trust fund is nearly broke, the amount of revenue gathered on the state and federal level-- from the gas tax is declining like crazy and at the same time we have bridges that are falling apart, we have roads that are crumbling.  What’s the alternative?

KARI CHISHOLM: The first thing I would do, if I were king of the world-- is raise the gas tax and then index it to inflation over time.

RICK KARR: In other words, the gas tax would automatically rise at the rate of inflation. Supporters of mileage fees argue that legislators lack the political will to raise gas taxes -- so, they say, state and federal governments need another plan to pay for critical repairs to roads and bridges. Last month, Oregon passed a law expanding of the mileage fees program starting in twenty-fifteen -- this time to five thousand vehicles. Meanwhile, Portland’s Democratic U.S. Representative Earl Blumenauer is looking for a Republican cosponsor for a bill that would test the fees nationally.

EARL BLUMENAUER: I want to take that Oregon experience and move it to the national level.  Where states can apply to test it in their own locations so that-- road users,   can understand how it works, what the advantages are and-- make it less mysterious.  The idea is to be able to encourage other states to innovate.