Type of Scheme
- Area-wide road pricing trial.
Date of Introduction
Background
- Oregon State Legislature's main source of revenue for repairing, maintaining and building roads - the gasoline tax - is declining, mainly due to the increase in fuel efficient vehicles.
- Drivers therefore currently pay insufficient gasoline taxes to support costs of their road system.
- In 2001, Legislature formed Road User Fee Task Force who concluded Road Pricing (called road user fee in Oregon) was best funding mechanism to replace gasoline tax (fuel tax).
- Road pricing now being practically tested as an alternative way to raise money for transport in the state.
- One-year pilot with 300 volunteer drivers due to begin in Portland in March 2006.
- Federal Highway Administration is funding the bulk of the project - $2.9 million over 6 years - with Oregon's contributing $771,000.
Aim
- To raise revenue for repair, maintenance & construction of roads.
How it Works
Charges:
- Drivers will pay a road user charge equal to 1.2 cents a mile instead of paying the current gasoline tax.
- Drivers will pay the mileage charge in exactly the same way as their fuel tax - when they fill up at the pump at the two service stations which have been equipped with mileage reading devices.
Technology:
- Scheme will use hybrid technology whereby drivers have on-board mileage counting equipment installed in their vehicles and Global Satellite Positioning (GPS) technology will pinpoint which zone vehicle is travelling in.
- In its current form, the scheme will only have very broad zones, but technology would allow for creation of smaller zones to allow peak pricing.
- System is designed to secure privacy with GPS receiving location data only for purpose of recording mileage charges accurately. It does not send any vehicle location data or store vehicle's travel history.
- On-board device transmits number of miles driven in differentiated zones via short range radio frequency to readers at petrol stations. This technology ensures that a vehicle's movement can not be tracked.
- At service station, gasoline tax is automatically deducted from the sale and mileage tax added. The Service Station Point of Sale (POS) System obtains details of the 'paid-for' mileage from a central computer in order to calculate mileage charge owed and then communicates latest 'paid for' mileage back to central computer.
- Mileage-counting device on pumps tells on-board vehicle device whether to count miles as "in state" or "out of state" to prevent drivers from being charged for miles driven outside the state.
- Incorporating the charge into existing fuel tax payment system circumvents enforcement issues and does away with need for expensive video monitoring enforcement equipment. As you fill up with petrol you pay your charge, thus enforcement and payment details are comparable to fuel tax.
- Back office administration needs are minimised as a department is not needed to send out bill requests or process individual incoming payments.
- As petrol tax will still be paid at the wholesale distribution level and passed down to the petrol stations, a mechanism is needed to ensure the correct amount of revenue is received by the petrol stations.
- If the amount of tax (fuel duty and mileage charge) paid at the pump is higher than that paid to the distributor for delivered petrol the Oregon Department for Transport (ODOT) collects the difference.
- When the petrol station collects lower taxation revenue than that paid to the distributor, the ODOT pays out the difference.
Enforcement:
- If the on-board unit is tampered with the road user reverts to paying fuel tax.
Next Steps
- Results will be used by the Oregon Department for Transport to draft model legislation for the Oregon State Legislature to consider.
- Should the mechanism be implemented state-wide, it is believed a long phase in will be necessary to ensure an orderly and low risk transition. Approximately 5% of vehicle fleet turns over each year, meaning scheme could take close to 20 years to fully implement.
- Statewide capital costs for fuelling station equipment and computing technology has been estimated to be less than $35 million.
Website
Oregon Department of Transportation:
www.oregon.gov/ODOT/HWY/OIPP/index.shtml.
References
The Energy Saving Trust, Pricing Our Roads: Is there a Better Way? 2005
www.energysavingtrust.org.uk.
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