Oregon’s Road User Fee Pilot Program Presented to NEACT LaGrande, Oregon August 4, 2005 James Whitty, Manager Office of Innovative Partnerships and Alternative Funding

Road User Fee Task Force Legislative Mandate: “To develop a design for revenue collection for Oregon’s roads and highways that will replace the current system for revenue collection.”

Oregon Road Revenue Sources FY 2005 (bonding excluded) Source: Governor's Recommended Budget

Effect of New Technology Vehicles on Highway Fund Revenue

Conclusion In the future, gas tax revenue will not be the primary source for funding our roads.

A per-mile charge based on Vehicle Miles Traveled (VMT) within a state Replaces fuel tax for participating motorists A Solution: The Mileage Fee

Policy Requirements Affordable…  System is accurate and reliable..  Differentiation of boundaries  Technology Feasible  Reliable……………….…….  Secure…………………..…..  Protects privacy of motorists…….  Minimal evasion potential………...  Minimal burden on private sector..  Seamless transition……………… 

Collection Possibilities Human Data Gathering Centralized Electronic Collection Toll way-Style Collection

Oregon’s Mileage Fee Concept

A per-mile charge based on miles driven within Oregon by zone. Zone 1 = in state Zone 2 = out of state Optional Zone 3 = rush hour The Concept

How it Works One way signal received by car to switch mileage counter between in-state and out-of-state zones. Mileage totals counted for in-state and out-of-state. No location information is recorded. Mileage read wirelessly at fueling stations. Gas tax deducted from gas purchase price (24 cents/gallon) and mileage fee added.

Fuel tax maintained for non- equipped vehicles Mileage fee integrates with fuel tax collection system Oregon’s weight-mile tax retained for heavy trucks Also testing “rush hour” pricing How it Works

No vehicle location data stored in vehicle No data transferred except mileage totals within zones Data transferred only at time of fueling via short range radio frequency Privacy

Vehicles No retrofitting Components installed during vehicle manufacture Service Stations Capital costs (Oregon): $33 million Annual operating costs (Oregon): $1.6 million Cost

Less risky – Bulk of revenue stream remains at distributor level (fewer taxpayers) Mileage fee gradually becomes predominant System Integration Retain current multi-state anti-evasion processes Fuel tax retained as redundant system to guard against system failure and tampering

May 14, 2004 Public Demonstration of Mileage Fee Technology Oregon State University Corvallis, Oregon Zone switching … Successful VMT data transmission … Successful Electronic calculation of fee … Successful Gas tax deducted … Successful Receipt presented … Successful

Policy Requirements - All Met! Affordable… System is accurate and reliable.... Differentiation of boundaries..... Technology Feasible Reliable…………………….. Secure……………………… Protects privacy of motorists……… Minimal evasion potential…………. Minimal burden on private sector… Seamless transition…………………

1.Retrofitting cost versus long phase-in 2.Setting the mileage fee rate 3.Requirements on vehicle manufacturers and fuel distribution industry 4.Interstate system standardization and revenue allocation 5.Integration with federal solution Policy Issues Remaining

Oregon’s Pilot Program Time Line: March 2006 – March 2007 Pre-Pilot: 20-vehicle preliminary control start Full Pilot: 280 vehicles from one community paying mileage fee in lieu of gas tax; service stations with integrated point- of-sale systems Rush Hour: Some pilot volunteers participating in Rush Hour Pricing Group

RUFTF Website