As the odometer turns...

Testing mileage fees in Portland, Oregon

Deborah Hart Redman
Senior Planner/Project Manager
HDR
Portland, Oregon

Our story so far
We bring you now to plucky little Oregon, tucked under the dripping Douglas Firs, where the bumper stickers urge folks to "Keep Portland Weird" and where the staid and sober Oregon Department of Transportation (ODOT) is quietly drawing up blueprints for a transportation funding revolution.

And not a moment too soon. Oregonians have not passed a gas tax hike since 1993, and the existing tax is not indexed for inflation. A series of reports over the past half-decade from ODOT's Road User Fee Task Force concluded that the triple threat of dwindling real roadway revenues, decaying infrastructure and growing demand for transportation facilities and capacity in Oregon was not going to solve itself. So these notoriously independent Northwesterners—pioneers at heart—resolved, with a legislative mandate in hand, "To develop a design for revenue collection for Oregon's roads and highways that will replace the current system for revenue collection."[1]

ODOT's mission for gasoline tax replacement: minimize changes for the public
The Road User Fee Task Force recommended an approach to a mileage-based replacement for the gasoline tax that would be simple, transparent, and gradual—and ensure motorist privacy. Carrying out this directive is ODOT's Jim Whitty, the charismatic manager of the Office of Innovative Partnerships and Alternative Funding. Whitty reminds the pricing wonks among us that "[n]otwithstanding what the academics can dream up, a new system cannot be thought of as legitimate or real until it can be practically implemented from a technical, financial and administrative perspective. And it must absolutely meet the public's sniff test."

In a practical sense, Whitty's crew is working to develop a system that, regardless of any behind-the-scenes complexity, will involve no more than one change that must be endured by public users of the transportation system. To accomplish this, ODOT, Oregon State University (OSU) and HDR, an architectural and engineering consulting firm, collaborated on a pilot program to test a few of the most critical components of an initial mileage-fee system design. These included reading and recording instruments both on-vehicle and at the pump, as well as some of the administrative requirements for a full-blown system that could replace the gas tax down the road.

The search for volunteers
To test the technology that will make that system work, ODOT needed a few hundred volunteers driving a variety of post-1996 eligible vehicles. Alex Nydahl, of HDR's Portland office, spoke with more than 500 people to come up with at least 300 vehicles. That one-on-one contact with the public offered Nydahl a unique window into the motivations of pilot program participants, and their most common concerns. "Although some folks were unabashedly enthusiastic about the prospect of picking up $300 and some gasoline discounts as enticements, the spirit of volunteerism prevailed," Nydahl reports. "Many prospective volunteers had genuine concerns about both privacy and the logistics of a taxation system based on miles driven—concerns I was happy to address with them on the telephone. Oregonians, for the most part, seem ahead of the politicians on the issue of infrastructure finance, and once they'd come to understand the funding dilemma, many expressed relief that the state was addressing the issue."

ODOT's on-board display reports four mileage categories: In-State, Out-of-State, Rush Hour (Portland Metro) and No Signal. (Source: Oregon Department of Transportation)

Baseline data collection now underway
Designed to test accuracy of pay-at-the-pump technology as well as gain insight into motorists' concerns and responses, the pilot program began in May with six months of baseline data collection. Except for the data collection obligations, and an innocuous display on each test car's dashboard, the volunteer motorists will experience no change during the first six months of the pilot.

In November, the group of 260 volunteers will divide into three groups—a small control group that will continue paying the gas tax, a "pure" mileage fee group and a congestion pricing group. A test of congestion pricing was required by FHWA as a condition of funding Oregon's experiment. ODOT chose a time-of-day and location-related charge, which totes up charges for driving in the congested areas of Portland during peak morning and evening hours.

All enrolled vehicles are now equipped with GPS receivers and data storage devices, and volunteers have swiped their cards at a first mileage read checkpoint. "The technology and equipment are working as planned," says Jill Pearson, project manager of the Road User Fee Pilot Program. "We have had a few dropouts, primarily because of unrelated car accidents, or a move away from the Portland area. Random reasons—not because people don't like the program."

Minor technology glitches solved
"We found that the mileage counting equipment draws power from the battery on some makes and models, particularly if the battery is older," Pearson says. Swapping out the equipment for an alternative GPS model has solved the problem in most cases. Fortunately, only two out of 260 participants quit the program for this reason. "This is valuable information. It's why we did the pilot program," explains an unperturbed Pearson. "It will help ensure problem-free implementation down the road. There are a lot of different makes and models, with different technology kinks to be worked out. Of course, built-in GPS technology will be standard by the time any program could be ramped up to replace the gas tax." OSU's David Kim confirms that "the mileage reading seems to be working well—though not 100 percent."

OSU has just collected its first set of surveys from the volunteers. Though it's too early to provide any definitive results yet, Pearson says, "It's already clear that the data we're collecting will be useful for the future of a program that helps Oregon fund its roads fairly and effectively."

Phase 2 on the drawing board
The next phase of developing a workable program will examine dicier issues such as balancing mileage, pollution and congestion charges in light of their sociological and economic implications, including impacts on travel demand. The beauty of Oregon's proposal is that regardless of the final mix of charges, the fee can be collected at the pump, yet incorporate a refined and targeted set of charges that might include local congestion charges or individual roadway charges based on time of day. The program will be rolled out gradually, exclusively on new, already-equipped vehicles.

Who will be first to implement?
Oregon's next step in the logical sequence leading to implementation would be passage of a bill allowing the program to go forward at the statewide level. Jim Whitty estimates at least six years until full deployment in Oregon, so an optimistic 2009 adoption would mean 2015 implementation at the earliest.

Oregon's trailblazing research—and that of other leaders in this area such as Texas—can be picked up by any state. Whitty notes, "They're all watching us—all the states, and even Japan, Germany and the UK. Like many states, Oregon's transportation funding crisis reaches a breaking point soon—Oregon's permanent and devastating decline in gasoline tax funds will hit right around the middle of the next decade, which is also the earliest possible date we could implement a gas tax replacement."

In the face of serious consequences for the infrastructure that keeps both economy and culture moving, Whitty and his team persevere. "Everyone knows the cliff is coming. We can only hope that our state and national leaders will not wait until that cliff is underfoot before acting," he says. And like any good Oregonian, although he hopes for sun, he keeps an umbrella handy.

For more information, visit http://www.oregon.gov/ODOT/HWY/OIPP/mileage.shtml.

Deborah Hart Redman has 23 years of experience on projects involving all aspects of transportation and urban planning. She specializes in long-range planning strategy development, corridor studies and transportation pricing and finance. She can be reached at (503) 423-3879 or Deborah.Redman@hdrinc.com.

[1] Oregon's Mileage Fee Concept and Road User Fee Pilot Program, Report to the 73rd Oregon Legislative Assembly, June 2005