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Title: Back-Seat Big Brother? Tax-by-the-mile technology to be tested in Oregon
Source: Willamette Week
URL Source: http://www.wweek.com/story.php?story=6337
Published: May 26, 2005
Author: Pete Hunt
Post Date: 2005-05-26 12:31:28 by Mr Nuke Buzzcut
Keywords: Tax-by-the-mile, technology, Back-Seat
Views: 219
Comments: 33

Back-Seat Big Brother?
Tax-by-the-mile technology to be tested in Oregon.

BY PETE HUNT

Oregon is on track to road-test whether black-box technology now in cars could one day be used to slap a tax on mileage.

No other state taxes by miles driven. And Oregon's civil libertarians and environmentalists aren't wasting any time in throwing spikes on the road to stop the concept.

The American Civil Liberties Union warns that the technology developed by a research team at Oregon State University is ripe for surveillance abuse.

"This is the government insisting that you have technology that can track you," says Andrea Meyer, legislative director for ACLU of Oregon.

And enviros question doing away with the current system that taxes gasoline on a per-gallon basis now, benefiting fuel-efficient vehicles and punishing inefficient ones.

"Fuel economy has gotten worse, not better," says Chris Hagerbaumer, of the Oregon Environmental Council. "As long as cars are consuming large amounts of fuel, [the state] should be able to tax that."

Here's the rationale for considering a tax on mileage:

Thirty percent of the Oregon Department of Transportation's budget now comes from a 24-cents-per-gallon gas tax levied at the pump. But reduced auto travel because of skyrocketing gas prices means less tax money to repair state highways.

State Sen. Bruce Starr, R-Hillsboro, proposed a road user fee task force when he was chairman of the House Transportation Committee in the 2001 Legislature. Since then, the 12-member task force-assembled from state legislators, ODOT reps and others-has secured a $2.1 million, six-year grant from the Federal Highway Administration to study the idea. The state Highway Trust Fund has chipped in another $770,000.

This March, 280 volunteers in Portland will equip their vehicles with mileage-recording technology (a modem-sized device that can either be mounted on the dash or stored in the trunk).

Mileage tax would be assessed at fueling stations, as the on-board mileage counter communicates with mileage readers at the pump. For the pilot program, the gas tax will be deducted from the total sale and replaced with the mileage tax.

Task-force administrator Jim Whitty, an ODOT manager, knows a mileage tax would be a tough pitch. But he suspects policy makers in Salem might "start getting desperate" as highway funds continue to dwindle.

According to the National Highway Traffic Safety Administration, 30 million cars and trucks already are equipped with "black boxes" that store information about speed and seat-belt use for use in accident investigations.

In answer to ACLU concerns, Whitty says the software doesn't record or retain a vehicle's location. Instead, the software computes mileage traveled and distinguishes between in- and out-of-state commuting through a Global Positioning System device that receives location information but doesn't transmit.

"People immediately make assumptions that are not true,'' Whitty says. "They think we haven't thought it through, but we have. We'll honor the public's need for privacy protection in this technology.''

But the ACLU points out that the federal grant requires the state to test the ability to count separately miles traveled in congested areas during rush-hour time periods to perhaps charge higher rates for travel in those zones. The only way for such a charge to work, the ACLU's Meyer says, is to know "where and when people are driving.''

In answer to environmentalists' fears, program supporters say different rates could be created for different types of automobiles. But they also note that environmentally friendly hybrid cars take up just as much highway space and create just as much wear and tear as any other automobile.

The test program has already had several delays.

The start date was pushed back after setbacks in finalizing the contract between Oregon State University and the state Transportation Department. And the test location was moved from Eugene to Portland after administrators could not work out an agreement with Eugene gas-station owners.

Oil bigwigs who oversee the franchises weren't thrilled about letting the state tinker with their fueling software.

Brian Doherty, a lobbyist for the Western States Petroleum Association, wonders whether the task force is any more likely to come to a deal in Portland. "We have grave concerns about opening up our proprietary computer systems," Doherty says.

But if the program proves workable, a pitch to the Oregon Legislature could come within a few years.

Says task-force chairman Starr: "We're in the process of getting in front of the curve."

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Begin Trace Mode for Comment # 13.

#13. To: Mr Nuke Buzzcut (#0)

I wouldn't have a problem with this if it were a private agency instead of a government.

The basic idea is that if everyone pays for what he uses, then people can save money by modifying their practices.

I'll give you an example. I'm a private pilot, but I'm nowhere near rich enough to own a plane; so I rent the planes I fly from a flight school. The flight school rents the planes "wet;" that is, the rental fee includes fuel.

Now, there are certain things a pilot can do to reduce the amount of fuel he uses. As just one example, he can lean the fuel-air mixture above 5000ft to achieve a more efficient fuel burn. But it's kind of a twitchy adjustment that for reasons that don't belong in this thread most pilots have been trained to be unduly nervous about, and if you just leave the mixture full rich all the time you may lose just a fraction in airspeed and pay just a fraction more for time in the air; but you'll burn considerably more fuel, and the excessively-rich mixture will leave carbon all over the engine that results in more frequent oil changes and less time between (very expensive!) major overhauls.

If we all paid for fuel separately, we would have an incentive to use as little fuel as possible, which would make for significantly less maintenance costs as well and allow the rental agency to lower the per-hour price it charges, which would be a good thing for everybody. But it creates a few logistics headaches that way (what do you charge if the plane isn't empty when it's taken out or brought back (light plane fuel gauges are notoriously inaccurate)? What if a renter takes the plane beyond its fuel range and buys fuel off the field?), so the rental agency has chosen to rent the planes wet, eliminate any motivation for conserving resources, ignore the shorter lifetime of the airplanes, and dump the extra expense for fuel and maintenance on the customers.

Which is exactly the same thing that happens when you charge everybody the same for road use. There's no motivation to minimize the amount of damage you do to the road, because it's not going to save you an appreciable amount of money unless everybody else does it too. Charge each person an amount proportional to what he costs you, and suddenly all your customers are helping you economize, so everybody's price comes down.

The only problem with this scheme is that it's the government proposing it. The government A) will coercively use the information it obtains in whatever manner it wants, and you have no recourse; and B) will determine the various tax rates in a purely political fashion that has nothing to do with concrete value.

If it were a collection of competing private companies that were doing this, the market would decide A) and B) and probably everybody would be happy with the result--and if enough people weren't, the market would lead one company and then all the rest to offer plans whereby you wouldn't have a GPS device in your car, and you'd drive however many miles you wanted to, wherever you wanted to, and pay a single fixed (high!) monthly fee for road use.

The obvious solution is for the Oregon state government to sell the highways to private investors. There'd be a tremendous reduction in government expenditures, plus they'd get a big chunk of money from the sale, plus the people would end up paying less money overall because private companies would run the roads much more efficiently than the government.

Barak  posted on  2005-05-26   14:23:18 ET  Reply   Untrace   Trace   Private Reply  


Replies to Comment # 13.

#14. To: Barak (#13)

a private agency instead of a government.

Ah, yes, a private police state is so much better than a govt one.

More efficient that.

Keeps buying the public private divide.

swarthyguy  posted on  2005-05-26 14:27:14 ET  Reply   Untrace   Trace   Private Reply  


#25. To: Barak (#13)

There's no motivation to minimize the amount of damage you do to the road, because it's not going to save you an appreciable amount of money unless everybody else does it too. Charge each person an amount proportional to what he costs you, and suddenly all your customers are helping you economize, so everybody's price comes down.

But the way government works, economizing to reduce costs is unacceptable. They would simply increase the per unit charge to fund the mandatory budget increases that bureaucrats demand. It's the same thing that happens during a drought when the government requires rationing. They raise the rates to guarantee their income.

Mr Nuke Buzzcut  posted on  2005-05-26 16:39:23 ET  Reply   Untrace   Trace   Private Reply  


#31. To: Barak (#13)

I wouldn't have a problem with this if it were a private agency instead of a government.

The basic idea is that if everyone pays for what he uses, then people can save money by modifying their practices.

I'll give you an example. I'm a private pilot, but I'm nowhere near rich enough to own a plane; so I rent the planes I fly from a flight school. The flight school rents the planes "wet;" that is, the rental fee includes fuel.

Now, there are certain things a pilot can do to reduce the amount of fuel he uses. As just one example...

I don't know about all that. What I do know, is that a tax on mileage will greatly impact tourism. Tourism is a major lifeblood in several areas, and I happen to live in one of them. People will not come to where I live and spend money because of the tax.

Government has never met a tax it did not like; nor has it yet to discover one it did not love to increase. And you and I both know a state tax on per gallon of gas isn't going anywhere. How will a mileage tax be administered. Will there be any difference in state and out of state?

Let's do some math and assume it is a flat rate regardless of where you drive. Say the tax is 10 cents per mile driven. It is roughly 613 miles from Tampa, Florida to Cherokee, North Carolina where the entrance to the Great Smoky Mountains National Park is. This is a very likely trip as I worked part-time for a Chamber of Commerce during college (many, many moons ago) Your one way tax is $61.30. Round trip is $122.60. At 5 cents, roundtrip is $61.30. At 2 cents per mile, $24.52 roundtrip. If Flordia is really draconian and says 20 cents per mile, roundtrip is $245.20. Or say it is 10 cents in state and 5 out of state. Let's split the difference as Yahoo says it is 355 miles from Tampa to Atlanta via I-75 leaving 177.5. At 10 cents that is $35.50 roundtrip plus another $3.40 (17 miles, 34 roundtrip) for the other routes Yahoo suggests in state. $40 roundtrip just to leave Florida. That leaves 419 miles out of state driving which is $41.85 roundtrip. A total of about $82 roundtrip tax. And this is assuming, of course, you don't detour ANY along the way. No excursions. Nothing. You just get to the hotel and walk the rest of your vacation. Putting on 120 miles for a week's vacation and you are suddenly pushing $100 tax for your trip.

Still planning on making that trip now? Just wait for the day that computer in the car not only counts the miles, but how long your car is running (ie- sitting in traffic) and taxes you for both.

scooter  posted on  2005-05-26 19:33:50 ET  Reply   Untrace   Trace   Private Reply  


End Trace Mode for Comment # 13.

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