Road User Fee Task Force Recommends Expansion of OReGO

September 21, 2016                                                                                                                16-091

For more information:

Michelle Godfrey, (503) 986-3903

Shelley M. Snow, (503) 986-3438

 

 Road User Fee Task Force Recommends Expansion of OReGO, Oregon’s Road Usage Charge Program

 

Statewide per-mile charging could generate an additional $88 million

in transportation funding by the year 2040

 

 

SALEM, Ore. – Oregon’s Road User Fee Task Force (RUFTF) today recommended a model for expanding OReGO, Oregon’s Road Usage Charge Program. The model would implement a per-mile fee for all new vehicles rated at 20 miles per gallon or better beginning in 2025. The recommendation will now go to the Oregon legislature for consideration in the upcoming legislative session.

“I am thrilled to have this recommendation come out of the task force,” said RUFTF Chair, Vicki Berger. “Road usage charging is the future of transportation funding. It is forward thinking, and forward looking. It’s important that transportation funding move forward—and that the OReGO program be part of that discussion—in the next legislative session,” she said.

The model was one of six options RUFTF considered. Each option varied the minimum mpg and the year in which to begin accepting vehicles into the program.

RUFTF’s recommendation was informed by ODOT’s projection that, by 2020, fuels tax revenue will “decline due to increased vehicle fuel efficiency,” and that “increased fuel efficiency will continue to reduce fuels tax revenue every year into the future” (Oregon Department of Transportation [2016]. The Future of Transportation Funding. Retrieved from ODOT website: http://www.oregon.gov/ODOT/HWY/RUFPP/Sept%202016%20Meeting%20Materials/ItemF_RUCEconomicReport.pdf). While Oregon fuels tax revenue has grown in 2016, the report projects that growth to slow in 2017 and ultimately become negative in 2020.

Fuels tax generates 40 percent of the State Highway Fund, providing local governments and ODOT about $530 million this year in funding for roads and bridges. The federal fuels tax is the largest source of federal transportation funds, which provide more than $600 million each year for Oregon roads and transit. Meanwhile, fuel efficiency of light vehicles increased 1.5 percent in Oregon last year; it increased 7.5 percent since 2008; and, it’s projected to continue increasing as federal Corporate Average Fuel Economy (CAFE) standards target an average of 54.5 mpg for all new vehicles in 2025.

That’s good news for the environment and for reducing dependence on fossil fuels, but it also means less fuels tax generated for each mile driven. Even as more people are driving more miles on Oregon roads (average vehicle miles traveled, or VMT, is increasing), the report projects that fuel efficiency will increase at a faster rate, offsetting the increase in VMT. “The result is the fuels tax will still decline, while wear and tear increases.” (Ibid., p. 4)

“Vehicle technology has developed to the point where you now have one driver on the road paying very little for its upkeep, and another driving the same miles paying much more, just because the vehicle has a different mpg rating,” said Travis Brouwer, Assistant Director for ODOT. “If a driver’s use of the road is no longer dependent on the purchase of fuel, the condition of Oregon’s roads and bridges shouldn’t be either. Charging a per-mile fee would ensure transportation funding does not decline due to increased fuel efficiency,” he said.

The Oregon Legislature first authorized investigation of alternatives to the fuels tax in 2001, when it created RUFTF. After 12 years of research and two pilot programs, the task force helped pass Oregon’s Senate Bill 810 (2013), the first legislation in the U.S. to establish a fully operational road usage charge system. The program was named OReGO and launched July 1, 2015.

The OReGO Program reports the system technology is working well, with only minor modifications needed to perform program operations accurately. More than 1,200 vehicles have enrolled and volunteer retention is at 75 percent. When asked about their experience, 93 percent of OReGO participants reported it was excellent, good, or okay.

Learn about OReGO (Oregon’s Road Usage Charge Program), sign up for the interest list, indicate interest in volunteering and find out how Oregon pioneered the program at myOReGO.org.

(More information about declining revenues and transportation funding is available on the ODOT website: http://www.oregon.gov/ODOT/Pages/Transportation_Funding.aspx.

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