An Economic Analysis of Oregon’s 2007 Road User Fee Pilot Program

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I. Introduction and Background

The gasoline tax has provided revenue for the Federal and State Highway Trust Fund (HTF) for decades; however, the tax rates have remained stagnate leading to the funds depletion. The HTF is responsible for funding highway and mass transit projects and also maintenance of those projects at the Federal and State level. In 2005 around 80 percent of funding for all projects came from the gasoline tax (Kim, Porter, Whitty, Svadlenak Lareson, Capps, Imholt & Person 2008, pg. 37). Thus, it is vital for the HTF to be a revenue collecting system that can replace the gasoline tax.

Oregon has recently begun testing an alternative revenue collection program to fund their HTF. Currently, State gasoline tax is set at 24 cents per-gallon and that is on top of the Federal gasoline tax of 18.4 cents, which only, 18.3 cents is used for roads, the total tax equals to 42.4 cents per-gallon (McMullen, Zhang, & Nakahara, 2010, pg. 360) (Austin & Dinan, 2012 pg.2). The gasoline tax has not been raised in years and is unable to keep up with fuel-efficient technologies. Consequently, the Federal government has had to allocate funds to States HTF for projects along with States having to borrow money form their other accounts. Therefore Oregon proposed the 2007 Road User Fee Pilot Program to test if a vehicle mileage traveled (VMT) tax is a feasible solution to the gasoline tax.

Oregon’s propose program is in response to new fuel-efficient vehicles and corporate average fuel economy (CAFE) standards that have forced the automotive industry to rise miles-per-gallon in new vehicles to help combat climate change. It is estimated that CAFE standards have lower the gasoline tax revenue around twenty percent (Austi...

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... Evaluation of Oregon's Vehicle-Miles-Traveled Revenue Collection System." Transportation Research Board 2079: 37-44. Print.

McMullen, Starr, Lei Zhang, and Kyle Nakahara. "Distributional impacts of changing from a gasoline tax to a vehicle-mile tax for light vehicles: A case study of Oregon." Transport Policy 17: 359-366. Print.

Rufolo, Anthony, and Thomas Kimpel. "Responses to Oregon's Experiment in Road Pricing ." Transportation Research Board 2079: 1-7. Print.

Thomas, Michael , and Kevin Heaslip. "Technological Change and the Lowest Common Denominator Problem: an Analysis of Oregon's Vehicle Miles Travelled Fee Experiment ." Journal of City and Town Management 2: 1-23. Web. 6 May 2014.

Whitty, James. "Oregon's Mileage Fee Concept and Road User Fee Pilot Program: Final Report ." Oregon Department of Transportation 1 Nov. 2007: iv-92. Print.

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