Under this option, motorists are charged a fee for every mile driven within the state rather than for the amount of gasoline they consume. Mileage data can be collected from a variety of methods, such as paper reporting or electronic means. The fee charged can be flat or variable, depending on numerous factors such as time of day, amount of congestion, cost of improvements or other factors.
Oregon has undertaken an ambitious plan to launch the nation's first mileage fee program. Under test projects in the state, the Oregon Department of Transportation (ODOT) has equipped a limited number of vehicles with electronic odometers to record their mileage at specially equipped gas pumps. Drivers then are taxed a rate for every mile driven instead of on gasoline purchases. Cars also are equipped with a Global Positioning System (GPS) to ensure that they are not taxed for miles driven outside the state. Out-of-state drivers or those drivers without the technology would pay normal gas tax rates at regular gas pumps.
Proponents argue that the Oregon system-which was recommended by a state task force in 2001-is a good mechanism to decrease reliance on gas taxes. Although flat rate excise taxes on motor fuel lose their purchasing power over time, the mileage fee measures the true number of miles traveled and is not influenced by inflation. Advocates also argue that the system will require all drivers to pay equally for use of the roads, regardless of the fuel efficiency of their vehicles.
Privacy advocates are concerned that the Oregon plan will give the government an alarming ability to track a driver's location and movements. Although ODOT officials claim that regulations and technological solutions will safeguard privacy, the program, by definition, will give transportation officials information about the driver's miles traveled, travel inside and outside the state, and information about the driver's in-state travel. The GPS installed in the car might even make it possible to pinpoint a driver's exact location.
Environmental groups also are concerned that the Oregon plan will eliminate incentives to purchase more fuel efficient vehicles. ODOT officials, however, have suggested that Oregon drivers could be charged less for more fuel efficient cars.