GPS tax: The terrible, horrible, no-good, very bad idea that just won't die

Kari Chisholm FacebookTwitterWebsite

Oregon's Department of Transportation is once again trumpeting the latest iteration of its plan to tax Oregonians based on mileage driven - not just gasoline consumed.

After all, gas taxes are no longer keeping up with the cost of highway maintenance and construction. That's because gas-powered cars are getting more efficient, hybrid and electric vehicles are becoming more common, and the cost of highways keeps going up.

But the concept they've been working on - at least as far back as 2005 - is utterly ridiculous, and will surely be resoundingly rejected by voters both liberal and conservative. Here's the latest gee-whiz coverage from the Oregonian:

Smartphones are great for texting, checking email, and surfing the web. But now your phone will be able to track the miles traveled in your car by connecting to an on-board device. Next, the information is reported to the government, which will then tax you on it. Yes, there is an app for that. ...

Sorry, but this new plan is just as bad as the last one. Completely obvious problems:

And worst of all? This entire effort is designed to tax energy-efficient vehicles. Check out this absurdity from the O's editorial board:

The tax as a user fee is no longer fair. When it comes to road repair, those who drive thirsty road hogs are now subsidizing those who drive efficient and unconventionally powered cars. This trend needs to reverse...

This trend needs to reverse? Seriously?! Electric vehicles and hybrids should subsidize "thirsty road hogs"? Are you kidding me? No, no, a thousand times no. We need to pay for highway maintenance. Insisting that carbon-spewing gas-guzzlers shoulder a larger portion of the expense is also an excellent way to reduce pollution. We shouldn't do anything that pushes consumers away from fuel-efficient vehicles. (And not just because we want to reduce carbon pollution. But fuel-efficient vehicles are lighter and thus put less wear on the roads, too.)

Here's what I'd do instead:

  1. Raise Oregon's gas tax to match our neighbors. In 2011, we raised it six cents to 30 cents/gallon -- but we're still 5.3 cents behind California and 7.5 cents behind Washington.

  2. Inflation-adjust the gas tax. It should go up every year based on inflation (or more). Otherwise, the purchasing power of those highway maintenance dollars will just erode over time.

  3. Raise car registration fees. I'm sympathetic (a little) to the idea that electric vehicles don't pay much at all for highway maintenance. Right now, all passenger vehicles pay just $43/year for registration (plus $19 if you're in Multnomah County). Bump that $10-25 and inflation-adjust it.

  4. Tax tires. 35 states do; Oregon doesn't (pdf). A tire tax would hit both gas-guzzlers and fuel-efficient cars, and would disproportionately affect those who drive the most miles. (Hey, look! A highway-maintenance fee that is directly tied to highway usage - without a GPS.) Most states are between a buck or two; California charges $1.75/tire. I'd consider doubling or tripling the tire tax for studded tires - which cause the most damage to our roads.

In addition to the privacy considerations, my biggest objection to the GPS tax is its complexity. It will require delivering new technology to every single Oregon driver. That technology will have to be maintained. And enforcement will be a nightmare.

The four revenue ideas I've proposed are easy to understand and easy to collect. They don't require installing new technology anywhere and don't violate anyone's privacy. They may not be gee-whiz sexy, but they're dead simple and will get the job done.

Previously on BlueOregon:

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      Gas taxes are inherently regressive. I'm tired of working class people being collateral damage in the power struggle between liberal and conservative elites.

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        Yes, they are regressive. But there are ways to deal with that. 1, you can spend gas tax money on transit - which typically benefits low-income folks. 2, you can adjust other taxes. Remember: it's not about whether one particular tax is regressive - it's about whether the entire system is regressive or progressive.

        Personally, I don't get why Oregon has an income tax that hits people that are below the (already too low) federal poverty line.

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          The GPS tax would be even more regressive than the gas tax, giving wealthier drivers of gas guzzlers a pass while those already skimping by in the most fuel efficient car they can find are forced to take up their slack!

          The gas tax is one of the few taxes that actually directly assesses a fee and benefits those who make use of what they support. They also hit the users hardest who make the heaviest impact on the roads by driving heavier less efficient vehicles, never-mind the punishing of those intent on simply trying to improve the environment by driving cleaner more efficient vehicles.

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    The administration and legislature that enact this into law will have a very short tenture and set world records for rapid completion of recall petitions. Young activists sink your teeth in now- you will have a bright future fighting this.

    Kari- you are spot on to go after this turkey. What it really is all about IMHO is the pathway to tax electric cars- they need to look at taxing at the "plug"- might disuade consumption though a blow to our carbon spewing coal burning buddies at PGE & PPL who despite the reduced stature in these more modern times really still pretty much run the state.

    But honestly for people that require links to Facebook to post on their site to talk about privacy and big brother that pretty much sacrifices any high ground on that issue.

    Here's what's happening at Facebook's new "data storage" center in Prineville- will the virus spread to your computer soon?

    Prineville Man Critically Ill with Likely Plague Crook County health officials said Monday they are investigating a probable case of human plague involving a man in his 50s who is being treated at a local hospital; NewsChannel 21 learned the Prineville man is in critical condition at a Bend hospital. More »

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      Let's not argue in this space about BlueOregon's commenting policy.

      I will merely note that commenting on BlueOregon is entirely optional. The GPS tax would be mandatory.

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    It's not sufficient to index to inflation, you also have to index to improving fuel efficiency if you want to maintain buying power.

    Purely electric vehicles are still going to cause a reduction in buying power.

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    If they are considering a mileage tax it would seem more efficient to Require all vehicles to have mileage recorded in DEQ test stations, pay the tax based on vehicle mileage when you renew your registration.

    For communities that don't require DEQ testing, it could still be done by licensing mechanics to verify mileage.

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      When ODOT studied this before and did their pilot project in Portland on mileage taxing and tracking, they decided, rightly I think, that it would be better to pay at the pump as people would be paying a small amount each time they got gas instead of paying a whopping big fee every year or two years. They also thought that there would be less incentive to skip on the fees if they were small frequent fees and collected by the gas stations as the fuel tax is now.

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      That doesn't answer the issue of out-of-state drivers... including letting off the hook all the cars registered in Washington that seem at times, around Portland and the coast anyway,to match Oregon cars one-to-one.(A flaw in Kari's tire tax plan as well)

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    Couple of points:

    Why does it have to involve GPS? Surely there is a much cheaper electronic tie-in to the odometer. We don't care WHERE you are; we care how many miles you drive. Maybe you need a simple beacon receiver that shuts the counter tie-in off if you leave the boundaries of the state, but that's it.

    Instead of a universal mandatory tax, why not an opt-in rebate? If you think you will save money paying by mile, buy the promoter tie-in. If your usage does go under the threshold, you get a check at the end of the year or quarter. If it goes over, you pay--but less than you would per gallon, still. So heavy users on the meter would generate extra revenue, just at a lower rate than the gas tax (but higher than the rate under the threshold).

    Why not start by f-ing the tourists first? That's usually how we squeeze revenue; we're raising the hotel tax soon so we can encourage tourism, apparently. Start by putting it on all cabs and rent a cars. Those you CAN make mandatory. and those are heavy mileage cars, so they'd all generate revenue.

    You could continue to incentivize energy savings by 1) indexing the mileage charge against vehicle weight and 2) a discount for partial zero or full zero emissions, that perhaps itself scales downward the more miles you drive.

    Lastly, I thought it pretty amusing to reject the idea based on voters throwing out the bums in anger--but proposing instead a significant hike in the gas tax. It may be what's needed, but pretending it somehow would be any more popular than a mileage tax is utterly silly.

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    Oregon already has a weight-mile road user tax system in place.

    For truckers.

    But ODOT refuses to adapt this to passenger vehicles.

    Doing so would not require GPS.

    It would be fair(use-based) and simple to enact.

    Why won't ODOT do it?

    Why do they keep coming up with ideas like putting a GPS in our cars?

    Why do they figure out how to spend Billions on freeway interchanges to Vancouver and a bridge that doesn;t lift high enough for boats to pass underneath?

    This isn't the ODOT I was hoping that Kitzhaber would leave us with as his legacy.

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      Pardon my ignorance, but how does the weight-mile tax work for truckers? Do they have to "check in" at various locations? Or is it odometer-based?

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    TLDR, I agree that GPS is stupid, and can expand on that. Raising gas taxes isn't the only option, though.

    Raising gas taxes to increase revenue will maintain the roads—but also the status quo.

    There are other ways to fix these ostensibly broken roads. Killing capital projects would free up funds for the state's ostensibly broken roads in a way that the 1-5% dedicated for non-motorized users never could (is 5% better enough?). The state and local agencies could also make a point of reducing what appears to be an unsustainable lane mile count. It doesn't have to be about revenue.

    So allow me to pat myself on the back for these brilliant, world-saving ideas, each more unpopular than the last, but there's no way around the bitter medicine.

    As for GPS…

    I'm going to ignore the (possibly legitimate) tinfoil-hat aspects and point out the less subjective things. It's a contrivance. From the very first time I heard about this idea, years ago now, it keeps coming back to:

    gas consumed ≈ miles driven * vehicle weight

    I have a few assumptions about GPS system: the gas tax will remain vehicle owners are responsible for unit and installation costs * GPS devices will make a vehicle exempt

    The tax has to be there. Oregon's lack of sales tax already undercharges nonresident visitors to the state. It's also an opt-out for the paranoid. Of course, they'll probably get their plates on camera at filling stations, and have to pay a coercively high rate to justify the alternate system's existence.

    There are direct costs, like the GPS devices themselves, and gadgets used by fuel attendants. There are the indirect costs of staff to validate devices, and certify both installers and attendants. Collections will mean more bureaucracy for the state, overhead for businesses, and surprise postpaid bills for consumers.

    There's a simple system already in place. Why mess with it? As hybrid drivers get "free rides", others will have an incentive to drive more efficient vehicles. The gas guzzlers left will be for the well-off who choose to pay for them, and the poor who will pay almost nothing for replacement vehicles and parts.

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    Mark, I question your claim that rental cars are high mileage. My bet is that the vast majority are driven from PDX to downtown, Hillsboro, or Beaverton and parked. Also, do we really want to choke tourism, one of our few growth industries?

    Ted, requiring the payment upon DEQ renewal could result in a pretty hefty payment at the time, otherwise it just won't raise enough revenue.

    Kari, tires? Nice idea but the same problem arises: how can you institute a tire tax that raises anywhere near the amount that a gas tax raises? It would be awfully simple to just drive across the border and save hundreds of dollars on your new tires.

    Give ODOT at least a bit of credit--they need to find some way to maintain roads in a world where major leaps in MPG is undermining their revenue stream.

    How do people here propose funding roads if electric cars become dominant? We won't be able to float the boat on the shrinking number of gas guzzlers.

    Some sort of tax based on miles traveled will have to be put in place.

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      PDX is essentially our only airport; everyone who rents a car and does NOT stay in Portland (like the coast, or Hood, or Bend, or Eugene, or Corvallis, et al), will rack up mileage. Maybe downtown the cars will stay parked in hotels, but transit doesn't go to all the tourist areas (Multno Falls?) and when I'm a tourist I really don't want to ride the city bus, typically. I would still wager that your average rental car acrues more miles per year than your average personal car. Would love data that confirms or disputes, though.

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    When Bureaucrats have extra time on their hands, they try to re-invent the wheel.

    Another problem with the electronic tracking units. What about motorcycles?

    Anyway, if ODOT has that much time on their hands, then I know where the next RIF should happen.

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    I'm not in favor of this proposal but IIRC aren't hybrid cars actually pretty heavy for their size because of battery weight?

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    As someone who uses a pick-up as a necessity in my work life, I have to accept that I will be paying more for gas because my truck doesn't get the mileage that my pal's Volt does. Those of us who drive such rigs - for work or for pleasure - get this. The added burden of a contraption that tattles on your odometer so the state can wring more dollars out of us will not be well received.

    Anyone who operates a small fleet will get kicked in the shorts, whether the fleet consists of a bunch of pick-ups or a pride of Prius (Pri-i?).

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    AND furthermore...

    (I actually have a whole lot of thots on this one - in between the expletives - but I will stay short and limited)

    I can easily envision that $326 bill from the state, which never got the new owner's registration from a car sold 8 months ago. Think it couldn't happen? I got yanked into small claims court when some yaahoo abandoned a car I sold for a friend (I HAD completed all the paperwork). The car was hauled off to a storage yard and they billed my friend for it's incarceration - even though the car had been long sold, the Judge told us he ALWAYS rules in the storage yard's favor, and we ought to just settle up outside the courtroom.

    ...just a preview...

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    The gas tax is seen as a road user fee, but I think that's wrong and causes a lot of confusion. Like with smoking, we all have an interest in people using less gas. Like cigarettes, gas should be taxed regardless of whether we have any particular use for the money.

    The gas tax should be high enough to discourage unnecessary driving and encourage use of efficient vehicles, but low enough that it doesn't overly burden the poor. If that level doesn't fully fund road maintenance we should cover the difference another way. The GPS idea is ridiculous for so many reasons. If we replace the gas tax with the GPS tax, we stop encouraging people to drive efficient vehicles and we cause more pollution.

    Everyone benefits from roads regardless of how much they drive because everything we buy is transported on them and they are necessary for police, fire, and emergency services. Therefore, whatever road costs aren't covered by the gas tax should be funded through progressive taxation like the income tax (maybe also the transient lodging tax so tourists pay their share too).

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    Another idea is to make registration fees progressive:

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      Yes, that would be an excellent improvement. Make the registration fees based on the weight of the vehicle (to address highway damage), the value of the vehicle (to improve progressivity), and age of the vehicle (decreasing over time, also to improve progressivity.)

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    This reminds me of adverse selection in health insurance: The higher the fuel tax the more people will switch to high mileage vehicles, forcing the fuel tax rate ever higher. The only people left paying will be those who can't afford a newer car.

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      So wouldn't that be a good thing? You sound like you are opposed to people buying more fuel efficient cars.

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        See comments from Paul and John below. High efficiency vehicles are not a problem, but getting back to an equitable (or as Evan points out, functional) road funding mechanism is.

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    To add to what BJ said, we are essentially in a death spiral with respect to funding from the gas tax. The rate isn't going up, but the vehicle fuel economy is thanks to ever increasing CAFE standards. Therefore, the more Priuses we have as a share of the fleet, the less and less funding we'll have to even maintain the roads we have, let alone expand it to keep up with population growth.

    To address some of Kari's bullet points:

    • Of course there would be a phase in period where newer vehicles are outfitted with the technology and older vehicles continue to pay a per gallon fuel tax rate. I think this isn't the strongest argument to use against a VMT fee.

    • I really don't get the privacy concerns. People these days post all sorts of personal information on social media, yet cry out Big Brother something like this comes up. Anytime you do anything electronically, there is a record. If you are truly so concerned, then start paying for everything with cash. I thought it was the conservatives that were so terribly afraid of Big Brother?

    -The simplest idea, what we really ought to do is your suggestion to index the gas tax to inflation. That would buy us some time until all vehicles are getting 50+mpg. This should have happened a long time ago and the current gas tax is far too low. Eventually though, we will need to change to a different system or the gas tax will have to jump at huge rates. If there is little political will to peg the gas tax to inflation, there is even less will to raise it to the levels to counteract the revenue loss from a fleet of 50+ MPG vehicles

    -Your feelings that you will eventually be subsidizing gas guzzlers can also easily be allayed. Since vehicles do damage to roads based upon their weight, the VMT fee they pay per mile should be that much higher for large trucks and SUVs. Not a difficult thing to institute.

    Overall, I am disappointed to see such a strong backlash to new ideas on a progressive site. Your objection to the cost of implementation is in my view the best argument against the VMT fee, but the others don’t really hold up. Indeed, Oregon may be trying to push the envelope too much – one of the takeaways from the last time they tried this was that the switchover would be rather expensive, but this was from the RUFTF in 2001. Technology will continue to come down in price, and yes, saying that the private sector would provide it has little bearing on privacy.

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      Seriously? You don't see the difference between a person who freely chooses to share his or her life with the world on Facebook, and the Government forcing you to divulge this information?

      You must have been perfectly OK with the PATRIOT Act and warrentless searches then.

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        You already tell the government your mileage on a number of occasions--inspections, emissions checks, transfer of title, et al. What exactly is private and pernicious about mileage?

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    So who is pushing these proposals at ODOT and where is the Governor on this issue? In theory he is supposed to be in charge of the administration. Is he just absent on this issue or does he sort of support them?

    I for one am totally with Kari's analysis and proposals and wonder where our Dem reps are on this. I realize that many Republicans think electric cars are a wasteful plot and they treasure the smell of gasoline in the morning when they fill up their monster SUV's, but actually paying more in gas taxes is unnatural. However, I have yet to hear from elected Dems on this issue.

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    Sorry to be snarky, but stereotypes have an amazing ability to cloud our vision.

    A few minutes on Google and you'll learn that the gas tax is regressive, and lower income groups are more likely to own gas guzzlers because they own older, less efficient cars, own trucks, and have larger households.

    So much for the GOP / SUV mindset.

    You know, if you're rich, you have money, and you know what, if you have money, you can just switch to a newer, more efficient vehicle, hybrid, electric, or whatever.

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      Paul, I respect your analysis on older cars, trucks owned by low income folks, but have you observed who drives the honking huge new SUV's? They are not low-income. And the truly low-income urbanites use public transportation.

      Rural drivers frequently do drive low mileage trucks out of necessity, but part of that is a cultural preference, not just job requirements. Furthermore, since we are discussing what should be done over the next few decades, basing your decisions on what older cars people drive today is rather silly.

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    Shifting to VMT fees is a pretty widely discussed idea across the country. And the usual suggestion option for those who don't install (or use their own existing) GPS systems is a check of the odometer and a fee based on total mileage (no rebate for miles traveled out of state) - either once a year or each time you fill up.

    For a reminder of the fiscal troubles ODOT is in, review this column of mine from past December. In short - increasing costs, decreasing driving, decreasing fuel consumption, growing backlog of maintenance, mid-21st-century spike of infrastructure reaching its design lifespan, and so on.

    We've got a broken transportation funding system.

    I appreciate that Kari tries to offer solutions - though the political appetite for them may not be present. The last time Oregonians were asked to increase the gas tax (in 2000) - they voted it down 88-12%.

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      The gas tax hike in 2000 wasn't exactly a "clean" bill -- there was a lot of stuff tied up in it. I voted against it because it repealed the weight-mile tax, even though I supported the gas tax increase. Better policy probably would get more support.

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        You're right. A clean bill might have broken 15% support. :)

        Seriously - there are few things that Oregonians hate more than increased gas taxes.

        Getting to 50% support simply ain't going to happen, especially when ODOT simply wants to blow all their money on things like the costly, risky CRC highway mega-project that its own Independent Review Panel says aren't worth doing it they don't find billions more dollars to expand more highways.

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    One thing I haven't heard anyone mention is the sliding rate that ODOT was talking about in their previous pilot project. For that you have to have GPS installed in all motor vehicles.

    The sliding rate was for what they called congestion pricing. That is, if you enter certain areas, the mileage fee goes up during certain times during a given day. That's been implemented in London and it's increased fees/taxes collected.

    When I read about ODOT doing something like that it made me glad I wasn't going to have to go into Portland more than once a week.

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    Not one comment about studded tires!? State wide, 84% of us don't use them. In Portland they cut road life in half & here only 10% of drivers use them. An OSU study in 1995 recommended first to ban studded tires or charge a fee of $145 per year plus inflation. Since the study is 17 years old, charging $200 per year is not unreasonable. Light weight fuel efficient vehicles do negligible damage to our roads. Studs are destroying our roads. Most of us get by fine without them. Let the people who want the "free" choice to use them, pay for the damage their causing. Les Schwab has been working behind the scene for 35 years blocking 17 attempts in Salem to either ban, fee or regulate studded tire use. Please BOYCOTT Les Schwab and write your representative and tell them to act in the interest of the people and not "special" interest.
    PLEASE, PLEASE PLEASE just raise the gas tax, 100% will go to roads not to fancy shmancy devices that won't fix one mile of road. I bought a 55mpg geo for $1000, so the poor can drive a smaller & cheaper, fuel efficient car, I do. Not all actions are for everyone, but for the vast majority of us the gas tax works, that's why fuel efficient & Hybrid vehicles are popular. Europe has a $3.50 per gallon gas tax, If ours was that high, I bet they could fix ALL the roads without a new GPS bureaucracy.

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      Bike commuting gives a remarkable ability to hear/see the number of cars with studded tires. And everytime I see one, it seems so obviously crazy that people put them on for months, all for the sake of driving on what must be the one or two days when they're useful.

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      *Not one comment about studded tires!? State wide, 84% of us don't use them. In Portland they cut road life in half & here only 10% of drivers use them. *

      That's why I suggested a double or triple tire tax for studded tires.

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    Some other options to pay for roads in this state: toll roads (using electronic tolling to minimize overhead) with tolls set at levels just sufficient to maintain each toll road in perpetuity; and greater use of "road utility fees" such as used in Tualatin, in which property owners pay a fee to maintain the roads that serve their properties.

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    Also, in regards to a tire tax: aren't most tires in the $100 to $200 range? We could charge $7 or $8 per tire, and they would still cost less to buy in Oregon than to drive to Vancouver and pay sales tax.

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    A few random thoughts. Apologies in advance if this restates anything already said -- I haven't read most of the comments.

    1. Contrary to Kari's concerns, a GPS-based system would actually be technologically and administratively easy to deploy. Tracking chips are small & inexpensive these days and could be added to the car either through license plate renewals (on the plates) or vehicle emissions testing.

    2. Legally, we, as citizens, have more privacy protections from our government than from private companies. Private corporations can collect and track much more information than the government. Given a blank slate for which type of entity I would want to control my personal information, I would choose government.

    3. The main hurdle to implementation is political. Conspiracy theories on the right and left abound. Voters' resistance to new taxes also make a GPS-based tax unlikely.

    4. There are other mileage-based tax structures, one of which is the weight-mile fee that Michael O'Leary mentioned. That's a good start. We should also implement system-wide tolls of freeways and major highways, starting with the pilot project listed in 2009's HB2001 Jobs & Transportation Act.

    5. Increasing the gas tax and other vehicle fees is not a good solution. Oregon needs to invest a larger percentage in transit, rail, bikes, and peds. The state constitution prohibits road user taxes to be spent on these alternative modes. Moving transportation toward a utility based model through

    6. Without excellent transit service or living in a dense urban environment with lots of shops/services, vehicle fees are regressive. Way too few Oregonians live in transit-rich neighborhoods with a Walk-Score over 90. Given the constitutional restriction on how vehicle fees can be spent, there's no good progressive reason to support increasing these taxes. Jobs are not a good enough excuse for progressives -- road construction only provides temporary jobs and creating a political/economic treadmill of more & more road construction is disastrous policy. Besides, we know we can create more jobs per dollar by investing in road repair, transit, bikes, and peds than in new highways.

    7. In law school, I wrote a lengthy paper that explores the privacy issues of GPS-based tracking and the social/environmental externalities it could address. I'm not optimistic for GPS-based road user fees, but I'd be happy to share it with anyone who wants to learn more. Warning: wonkish, legalese, and hypothetical dreaming all abound.

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      Thanks for your thoughtful notes, Brock.

      1. The question isn't "tracking chips". If they were just dumb RFID chips (or something similar), you'd have to wire the state with readers. The proposal they're ginning up now are GPS devices that actually geolocate themselves and store that data locally - presumably for download later.

      2. Agreed. That's why it's so comical that ODOT has decided it's somehow better to hand that data to private companies. Not that state government's track record is much better. (Exhibit A: Dennis Richardson, the spam king. Exhibit B: The sale of Oregon DMV license data in the 1980s, which led to the murder of an actress in Oregon by a stalker.)

      3. You don't need to be a tinfoil hat guy to be concerned about your privacy.

      4. I'm all ears.

      5. Fair point. Let's fix that. Gotta be easier than convincing the public of the benefits of GPS tracking.

      6. Yes, but they can be made less regressive (see Chip Shields, above.) And it's not about specific taxes. It's about the overall system.

      7. Would love to read that.

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    Kari's plan to fund roads will work - for a while. At some point, vehicles powered by natural gas, electricity, and other alt fuels will need to pay a fair share of infrastructure costs. At present, I agree that a subsidy for such efficent cars is worthwhile.

    As to "conspiracy theories": The NSA Is Building the Country’s Biggest Spy Center (Watch What You Say)

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