The Challenge of Financing Oregon’s Highways Portland State University EMPA Capstone Presentation Lynn Averbeck 2011 Cohort June 15, 2013

Highway Trust Fund Projection

Doing Nothing is Mission Failure

12 Years of ODOT Policy Work

24 Alternatives Explored by ODOT Battery tax Bicycle fees Drive-through service fee Electricity generated by vehicle tax Emissions fee Indexing fuel tax for inflation New vehicle tax Parking fees Property taxes Registration fees Rental car tax Road utility fees Safety violation fee System development charges Tire tax Title fees Transportation impact fee Use-fuel taxes increase Vehicle impact fee Vehicle ownership tax Weight-mile truck tax increase Indexing fuel tax for fuel-efficiency improvements Temporary visitor access fee General Fund

June 13, 2013 Oregonian

HB 2453 RUC System Features 55+ MPG vehicles purchased after July 1, 2015 5,000 vehicle voluntary program A non-GPS option is mandated Provide choices for motorists Use open market for technologies Use private sector and PPPs for mileage reporting and tax processing High flat annual rate opt out Protects and destroys personally identifiable information

Some of the Risks Projected revenues not met Private market doesn’t see ROI Legalities of data commodity and privacy Technology not quite ready for electric vehicles Public rejection Auto dealers reject participation

Capstone Purpose and Significance Document ODOT policy evolution Analyze current alternatives Develop recommendations to ensure high performance ODOT will be the first in the world Historic documentation doesn’t yet exist Leadership opportunity

Capstone Process Collect and Review 12 years of documentation Literature Review to compare ODOT to others Consider the Context Develop performance criteria Determine current alternatives Provide Recommendations for moving forward

Literature Review Other States Multi-State International Electric vehicles, smart grid, connected vehicles Public Awareness and Perception Oregon’s Choice: Road Usage Charging (RUC)

10 Performance Criteria for RUC 1. Acceptable to the public 2. Full implementation plan in sight 3. Revenue sufficiency 4. Safest administrative rule-making context 5. Lowest cost for ODOT to administer 6. High accuracy, reliability and security 7. Highly adaptable to local jurisdiction and interstate coordination 8. Highly adaptable to future technological changes 9. Low risk of private sector “soaking” the public 10. System designed for high compliance rate

Policy Analysis Findings Neither alternative is a clear winner ODOT’s policy process has been thorough but complicated The public doesn’t know this is coming Big and numerous risks on the table The current bill is the best policy choice at this time, but high risk of failure (backlash) if certain things are not addressed during implementation preparation phase.

8 Recommendations for Moving Forward Develop a complete phasing plan Organizational framework Long term public education plan Internal training for ODOT employees Transparent and frequent reporting Performance criteria “report cards” Budget support for assistance to other states Local jurisdiction outreach

Thank you “The instrument of leadership is the self, and mastery of the art of leadership comes from mastery of the self.” (Kouzes and Posner, “The Leadership Challenge”)

Kingdon’s Streams Policy Model