For more information: Michelle Godfrey, (503) 986-3903 or (971) 304-9705

Oregon expands its Road Usage Charge Program

Front: ODOT Director Matt Garrett and Governor Kate Brown. Back (L to R): Maureen Bock, OReGO Program Manager; Tammy Baney, Chair, Oregon Transportation Commission; and, Julie Brown, Oregon Transportation Commissioner

SALEM, Ore. – Do you drive a vehicle that gets 40 mpg or better? If so, you could soon save money on your vehicle registration fees by enrolling in OReGO, Oregon’s Road Usage Charge Program. That’s according to House Bill 2881, new legislation signed by Governor Brown today that expands the nation’s first pay-by-the-mile system. The changes in House Bill 2881 go into effect Jan. 1, 2020.

Once enrolled in OReGO, drivers of electric vehicles or those getting 40+ mpg are exempt from mpg-based registration fee increases while in the program. So some drivers (particularly those that don’t drive a lot of miles) could save money by joining.

“The bill outlines one more step toward sustainable funding through road usage charging, and represents one more step forward paved by Director Garrett and his team at ODOT,” said Governor Brown at the bill signing today. “The historic implementation of OReGO, the nation’s first road usage charge, provides a fair and sustainable path to transition from a per gallon charge to a per mile charge. The system is going to enable us to maintain and improve Oregon’s infrastructure in the face of growing fuel efficiencies,” she said.

Oregon raises money to take care of roads and bridges through gas tax paid at the pump and vehicle registration fees. With more vehicles getting much better fuel efficiency, many people are paying less in gas taxes while using the road just as much. OReGO was designed to ensure drivers pay for what they use – miles of road – instead of what they consume – gallons of fuel.

OReGO drivers may save money at DMV

Starting in 2020, annual registration fees will be applied according to mpg rating as follows:

The rate increases are tiered by mpg category because these drivers now pay very different amounts of gas tax, even if they drive the same number of miles. Because of the differences in fuel efficiency, a driver’s contribution in gas tax does not always match their actual use of the road. OReGO offers a true measure of road use.

Should I pay by the mile instead?

Following is a comparison of gas tax versus road charge at 10,000 miles driven per year starting Jan. 1, 2020.

Drivers can compare what they would pay in road charge versus what they currently pay in gas tax by plugging their own mpg and typical miles into the OReGO calculator.

“The best benefit may be for electric vehicle owners because their registration fees will increase the most. If they drive less than about 6,100 miles a year, they will likely save money by enrolling in OReGO and paying by the mile instead,” said Maureen Bock, OReGO program manager. “While we can’t yet support all vehicles, we are implementing new technologies that will allow more drivers and vehicles to participate.”

Other policy changes in the bill that expand OReGO

While House Bill 2881 now allows an unlimited number of vehicles in OReGO (enrollment was previously capped at 5,000), it only qualifies vehicles that get 20 mpg or better. Because 20 mpg is the “break-even point” at which gas tax paid equals the road charge, this policy change means gas tax refunds will no longer be paid to OReGO drivers. Drivers of low-efficiency vehicles will simply continue to make their contribution to road and bridge maintenance by paying at the pump. (Owners of vehicles under 20 mpg and currently enrolled in OReGO will be grandfathered in and still receive credit for gas tax paid.)

The new legislation implements additional policy changes to expand OReGO. It sets the OReGO per-mile charge rate at five percent of the gas tax, so future gas tax rate changes will automatically change the per-mile rate as well. And, it directs ODOT to consult with vehicle dealers to determine ways to encourage participation in OReGO at the vehicle’s point of sale. This could add convenience for drivers and increase enrollment.

Why did Oregon create OReGO?

Funding for transportation system maintenance, improvements and construction has not kept pace with needs in Oregon and around the country since the 1990s. This is due in part to more fuel efficient vehicles purchasing less gas, thus paying less in gas taxes – the main source of funding for maintaining and building roads, bridges and highways.

The Oregon Legislature identified this trend in 2001 and established Oregon’s Road User Fee Task Force to investigate options to the traditional gas tax. With its direction, ODOT designed and conducted pilot programs in 2007 and 2013 to test a per-mile charging system. The fully operational and voluntary system, named OReGO, launched in 2015 and was the first of its kind in the nation.

By law, Oregon’s Road Usage Charge Program offers motorists choices for the technologies they use to report miles driven as well as how they manage and pay their road use charges. They can obtain services through private sector account managers with market-driven options that are efficient and cost-effective.

Charging by the mile has been recognized by transportation and business leaders across the country as a way to generate sustainable transportation funding and make sure everyone pays their fair share for use of the roads. Taking Oregon’s lead, many other states are considering charging by the mile, and members of Congress are exploring taking this approach national. As the leader in road usage charging, Oregon is working to improve the system by exploring new technologies and leading a coalition of western states that is working through how this system could operate across state lines, so out of state travelers would pay their fair share to use Oregon’s roads.

OReGO has enrolled more than 1,600 vehicles to date. Learn about OReGO, sign up for the interest list, enroll as a volunteer driver and more at MyOReGO.org.

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