Seeking Fiscal Health Without Gas Tax
By SARAH KERSHAW
CORVALLIS, Ore. ? Two professors were cruising around the campus of Oregon State University here in a Ford Explorer. A wireless black box, mounted on the dashboard, tracked the miles in a test of a per-mile fee system that state officials said might one day replace the state's 24-cents-per-gallon gas tax.
The professors drove to the edge of campus, a laboratory with an old gas pump. The mock service station was equipped with computers that read the black box and calculated how many miles the professors had clocked, broken into categories ? in-state, out of state and during rush hours ? and levied a tax based on the miles driven rather than gallons burned.
The Oregon experiment is among several efforts across the country designed to increase state revenue for road maintenance and construction without raising gasoline taxes. Oregon's examination of a "vehicle miles traveled tax" comes at time when many states are facing depleted transportation budgets, chiefly because of inflation.
Projections indicate that the financial situation will worsen in the years ahead as fewer gas tax dollars are collected, especially in states that have pushed use of fuel-efficient vehicles.
Oregon is one of 10 states to have adopted a "clean cars program," a set of incentives designed to reduce pollution related to global warming, according to the National Association of State Public Interest Research Groups. Now, energy experts say, it is among the most aggressive in testing a way to offset the financial effects of those environmentally friendly policies.
Estimates show that by 2025 at the latest, state and federal fuel efficiency measures to reduce oil consumption and emissions of heat-trapping gases like carbon dioxide will cut per-mile gas costs by 15 percent to 25 percent, according to the Transportation Research Board of the National Academies. Less conservative projections suggest that those cost reductions could happen by 2015 or earlier, depending on the pace of sales of fuel-efficient cars.
Reduced consumption would undoubtedly result in a huge hit to the tax dollars collected by many states, which rely on gas taxes to pay for most highway costs ? particularly states on the West and East Coasts. In Oregon, for example, 80 percent of the state highway money comes from its gas tax.
States on the coasts have also been the most aggressive in pursuing ways to reduce gasoline consumption, and consumers have been more apt to buy the fuel-efficient vehicles, including hybrids.
In a signal of growing consternation about the declining tax revenue, $100 million was earmarked in President Bush's latest proposed budget to test alternatives to the gasoline tax on a broad scale, according to the federal Department of Transportation. Oregon officials hope to tap into some of those dollars to expand the experiment here.
A pilot program based on the experiment rolls out at the end of March and will last at least a year. Within the next six weeks or so, 280 paid volunteers will have their cars equipped with a global positioning system that will allow the vehicles to be tracked by computers installed at two Portland service stations, where the drivers will be required to fill up.
The Oregon program is being watched closely across the country, according to the National Conference of State Legislatures, but it has also touched off some privacy concerns because the same system could be used to track a driver's location.
Critics say the G.P.S. records collected by the service stations could be subpoenaed for any number of reasons: criminal cases involving terror suspects or civil cases like divorces, where, for example, a suspicious husband or wife may seek gas pump receipts to prove the whereabouts of a spouse.
"I think what we've learned since Sept. 11 is that federal law enforcement seems to have an insatiable appetite for every bit of information that might be available," said David L. Sobel, general counsel at the Electronic Privacy Information Center, a civil liberties group in Washington. "The existence of such a database, which would, for the first time in history, allow for the creation of detailed daily itineraries of every driver, raises obvious privacy concerns."
Proponents of the Oregon experiment acknowledge that the privacy issue must be addressed, but the State Legislature would ultimately address such policy questions if the gas tax were to be replaced by the G.P.S. fee system. Under the pilot program, data collected at the two participating service stations will be routinely erased, except for the most recent gas pump receipt, said James M. Whitty, manager of the Office of Innovative Partnerships and Alternative Funding at the State Department of Transportation.
"There is modest information accessibility here," Mr. Whitty said, adding that the system would track where a motorist filled up but would not go beyond whether the miles were driven inside or outside the state and whether they were driven during a morning or evening rush.
But Mr. Sobel said that if too much data was erased, customers would not be able to dispute charges by seeking their records, as can be done through credit card companies.
The actual per-mile tax under the Oregon system would be determined by state lawmakers. But for the purposes of the pilot program, it is set at 1.2 cents a mile, with extra taxes imposed on miles driven during rush hour and none for miles driven in other states or when there is no G.P.S. signal. The total works out to be roughly on par with the current state gas tax, officials said.
"It's a complete idea," said Mr. Whitty, who along with the professors here began work on the mileage tax in 2001, after the Legislature mandated an examination of alternatives to the traditional gas tax. The $2.9 million experiment was financed by both state and federal money.
It is too early to know whether such a system would discourage people from buying fuel-efficient vehicles. Mr. Whitty said he had heard of some drivers of fuel-efficient vehicles being upset. Others, though, were feeling guilt about having paid fewer taxes than most drivers, he said.
Mr. Whitty also said that the privacy concerns might stem largely from fear of the unknown, even as global positioning systems are common now in vehicles because they can help drivers with directions, among other things.
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