Oregon Considers a Per-Mile Tax for Efficient Vehicles


The state of Oregon is considering the introduction of a tax on every mile driven by fuel-efficient cars. Their reasoning is that gas tax revenue has decreased, and this is a way to increase the funding available for road maintenance.

The gas tax in Oregon is 30 cents per gallon, and instead of increasing it, they are considering using a per-mile tax, of which the revenue should be sustained longer for the following reasons:

  • Vehicles are becoming more fuel-efficient with each new model, so the drivers have to buy less gas, and less gas purchases = lower tax revenue;
  • More hybrid vehicles are on the market, and there is a gradual shift to them.
  • Older, less fuel-efficient vehicles are being retired as they become too tired, reducing the number of gas-guzzlers on the road. Gas guzzlers generate the most gas tax revenue because the most gas has to be purchased for them;
  • Since this gas tax is not calculated as a percentage of gas bills, but rather a fixed 30 cents per gallon, a tax on every mile driven would be immune to gas price decreases, and, since gas price decreases cause some people to drive more, that might cause a net increase in per-mile tax revenue since there would be more miles driven.

An alternatives that will keep gas tax revenue increasing with inflation and gas prices increases is a gas tax that is a percentage of peoples’ gas bills. Every time the price of gas goes up, and every time inflation occurs, gas tax revenue would automatically increase.

This approach makes cars overall less attractive, and might encourage more cycling and transportation by foot, which is very energy-efficient and good for public health.

There are, however, some drawbacks.

  • There is a struggle to encourage the adoption of not only hybrid and electric vehicles, but smaller, and more fuel-efficient cars. As an alternative, a percentage-based gas tax like the one mentioned above would make smaller, and more efficient cars more attractive, while SUVs, old cars, and large luxury and sports cars become less attractive, shifting sales towards the former to a limited extent.
  • This provides no incentive for the purchase of more fuel-efficient cars, or for hypermiling.

Source: StatesmanJournal.com

About the Author

loves attending and writing about/photographing events, and he writes on CleanTechnica, Gas2, Kleef&Co, and Green Building Elements. He has a keen interest in physics-intensive topics such as electricity generation, automobiles, refrigeration and air conditioning technology, energy storage, and geography.
  • The fuel tax in Oregon is tiny, surely there is room to increase it sufficiently to offset lost revenue from more fuel efficient vehicles!

    It would be crazy to introduce a tax which acts to remove incentive to reduce fuel consumption.

    Here in the UK, fuel tax is very high by US standards at around $1.30 per litre or approximately $4.95 per US gallon, and as a result, an average UK new car does around 45 MPG (US gallon) compared to only 23.9 MPG for the average new car on US roads.

    If the US could improve fleet fuel economy to UK levels, it would have no need to import oil, and consequently would improve its balance of payments and have less reason to fight wars in the Middle East so saving hugely on military expenditure!

  • mark

    A better approach would be to base the tax on vechicle wieght and miles driven. The heavier the car the more you pay. This reflects the abuse SUVs and trucks push onto the road they are traveling on vs the small lighter fuel efficent cars that not only burn less gas but are also much more road surface friendly.

    Pay for use should be the rule, no more free rides for the mega SUVs!

  • ASG

    If you look at the data, only semis actually are heavy enough to damage asphalt roads substantially. Using the gas tax for road maintenance is misplaced – taxing EVs/Hybrids per mile is even more so. We should look to change the tax code to address the damage (tax freight by ton; tax studded snow tires); and appropriately incentivize the population (gas tax supports public transit, not roads). It’s complex but changing the tax structure is the quickest way to change behavior.

    • Sean

      Civil eng student here…. ASG is right
      the “standard axle” is 9 tons (metric), which is spread over 4 wheels
      2.25 ton per wheel

      pick a really heavy car (@ 2.5ton) / 4 wheels… 650kg/ wheel, very light

      aside from semi’s the other major cause of road ware is water getting underneath the asphalt, either from water pipes, or poor drainage.

      However, if you were to include all of road related expenditure a tax on miles driven makes sense (possibly with a multiplier for weight). road accidents are horrendously expensive. Street sweeping, line marking bridge maintenance. Motoring is heavily subsidised in Britain, in the US it is horrific.

      Strategically there were benefits to subsidising motoring, An auto industry can be re-tooled to turn out tanks, long straight stretches of highway can be used as emergency landing strips. Trucks can be used on dirt roads if infrastructure is bombed.

      I am not sure if the benefits outweigh the costs.

      • It used to take 3 months to move a military unit across the country. That’s why the interstate highways were built. Even before fiat currency made “was it worth it?” a laughable question, it was (and is) well worth the expense.

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  • T Adkins

    If they want to change the tax, go to say 10-15% sales tax on the price of gas get rid of the 30 cent per gallon and if they feel they need to charge per mile charge everyone per mile (some where between 1 cent per 10 mile and 1 cent per 1 mile). As long as they remember this is a tax to repair and maintain roads not just a tax to gouge money from people.

  • While Sean and ASG are correct that high weight-per axle vehicles are the culprit for road wear, they neglect to include the highest mileage heavy weight-per-axle vehicles in most cities: the bus system.

    The average city bus does a little over 850 times more damage PER MILE than a passenger vehicle (car, SUV, bubba truck). And city buses put on A LOT of miles on the same roads (the bus routes). As a municipal agency, transit districts typically do not pay fuel (road repair & maintenance) taxes… price of gas goes up, more people take public transit, mileage and weight on the roads increases while at the same time less fuel tax is paid (so the tax coffers go down while damage increases). That 850 multiplier is for an average bus load — fully loaded (or standing room only/overloaded) during peak transit times (rush hour) and the multiplier skyrockets (which is one reason why fines are so steep for overloaded semis).

    Slide #14 & 15 of The Ohio State’s Professor of Urban Planning Philip A. Viton’s PDF “Understanding Road Wear and its causes” spells it out for lay folk, and the rest of the PDF goes into the engineering for those inclined. http://facweb.knowlton.ohio-state.edu/Fpviton/Fcourses2/Fcrp776/F776-roads-beam-handout.pdf

    So if you want the tax to be fair in terms of taxation based on the amount of road damage a vehicle does it must be a combination of miles x damage multiplier. These are well-known values in the road engineering industry (ESAL – equivalent single axle load). The upshot is it that the bulk of the cost will be paid by semi-tractor trailers (high ESAL/high mileage). Which will shift even more freight to rails (as it should be). Moving high frequency mass transit routes to light electric rail is a critical investment in sound energy policy (electricity is vastly more efficient and is produced locally and possibly sustainably) as well as vastly extends the lifespan and quality of the roads which is critical for lightweight sustainable vehicles (electric bicycles, eMotorcycles, eCars).

    Wether or not this fair taxation system would generate enough revenue to keep the roads under repair is an accounting question — there’s no doubt it would cause a dramatic shift: based on the amount of road wear/damage their vehicles DON’T do, under the current per-gallon taxation system your typical passenger vehicle is being vastly overcharged!

    • Surely on “the polluter pays” principle, emissions should factor into the road tax calculation in the same way as road damage – and I don’t mean only those emissions causing climate change.

      On some estimates, vehicles in urban areas may now be causing more casualties – deaths and injuries through the health effects of pollution than through crashes. Suppose you factor in an estimate of casualties and calculate a public cost of $500,000 per death and $50,000 per year or serious ill health for both pollution and accidents, then this factor should be calculated into the overall tax along with crop and forest damage from acid rain, pollution events such as contaminated waterways from spills, damage to habitat, and the contribution of vehicles to climate change and you begin to have a cost reflective tax structure.

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  • cp

    this is hysterical…in the end nobody wins except big gov`t