As states scramble for new revenue, many wait for the results of Oregon’s pilot mileage tracking program.
Oregon is set to tax motorists based on the number of miles they drive as opposed to the amount of fuel they consume, raising concerns about cost and privacy, Fox New reported.
Following a recently signed bill, the pilot program is expected to roll out in 2015 with a preliminary group of 5,000 volunteers, as other states watch the model closely to see the outcome. If the plan is adopted following the pilot program, it would replace the 30-cents-a-gallon state tax in Oregon with one for 1.5 cents a mile, for those participating.
Oregon isn’t alone in looking for new revenue. As Americans drive less and vehicles have become more fuel efficient, the current gas tax isn’t as lucrative for states as it used to be.
The federal Highway Trust Fund, which gives money to states for highway construction and repairs, has needed a congressional bailout four times since 2009, in part the result of no federal gas tax increase in the past 20 years, Fox News reported.
The issue over how to fund necessary infrastructure repairs, such as to roads and bridges, has led many to call for an increase in the federal fuel tax.
But CNN Money reported that a higher gasoline tax would be extremely unpopular in a country where almost 90% people drive to work. The last hike of 18.4 cents a gallon took place on Oct. 1, 1993. Currently, the tax raises about $30 billion a year for the nation, according to the Institute on Taxation and Economic Policy. In April, a Gallup poll found two-thirds of Americans opposed a hike in state gas taxes of up to 20 cents, even if it went to pay for infrastructure, and the Obama Administration and the Tea Party are against the idea.
Oregon’s mile tax could be a viable solution. But economists and civil libertarians are concerned about the Oregon tax because of the fear that mileage meters could track and record residents’ whereabouts, thereby infringing on privacy, Fox News reported.
Rick Geddes, a Cornell University professor, told Fox News the device is simply attached to a vehicle’s computer and cannot track locations. But he acknowledged that privacy concerns could resurface if the government expanded the program and used SmartPhones or apps to track movements.
Cost is yet another concern, including who pays for the devices.
Oregon is reported to be considering several tracking methods for the pilot project’s 5,000 volunteers before the 2015 start date appears. It is expected that mileage meters will be connected to the vehicles’ odometers or GPS systems that could better track non-taxable miles on private and out-of-state roads.
A 2012 Government Accountability Office report, however noted that the costs of a GPS system for 230 million U.S. passenger vehicles would likely be greater than the cost of collecting fuel taxes.