The Michigan legislature continues to wrestle, unsuccessfully, to increase needed transportation funding. How much and through what sources? Who pays how much? Is it regressive? How much new revenue and how much through budget cuts? It is complicated – and one thing we heard about the failed Prop 1 is to keep it simple.
Well, it doesn’t get much simpler than what Oregon and potentially Washington, Colorado, Idaho, and California are putting into play. Oregon is actively testing a pay-by-the-mile usage system. That is right – no tax at all – a usage fee of 1.5 cents per mile you travel! You decide if you are going to drive, how far, and when – and you pay 1.5 cents for each mile you drive!
Simple.
Why? New cars have never been more fuel efficient and will continue to be even more fuel efficient in the coming years. In addition, more drivers are turning to hybrid and all-electric vehicles – which contribute little or nothing to road improvement revenue. That’s great for the environment and cost savings, but it also means fuel-tax revenue keeps shrinking, leaving less available each year for highway maintenance and construction, creating the pressure to raise the rate of the tax.
This situation led Oregon decision-makers to take action to address this situation and to create, in their minds, a fair, sustainable source of revenue to fund transportation projects in Oregon. The result is the OReGO program. Here are some specifics of the program they are currently testing:
- OReGO participants will pay a road usage charge for the amount of miles they drive in Oregon, instead of the state fuel tax.
- The OReGO road usage charge is set at 1.5 cents per mile.
- Drivers will get a credit on their bill to offset the state fuel tax they pay at the pump.
- Drivers will have their choice of secure mileage reporting options offered by OReGO‘s private-sector partners.
- Drivers’ personal information will be kept secure and private.
- Currently, OReGO is limited to 5,000 cars and light-duty commercial vehicles registered to volunteer participants.
The idea is that you would pay for the use of the roads just as you pay for your heat or your phone – by how much you use it. It is in testing phase and they are going to have to work out some things, but I think this is the way to go today, and especially when cars are mandated to average 45 miles per gallon in the next decade.
For more information on this program, go to the ODOT website and check it out. What do you think?
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