Oregon to adopt driving tax by miles driven on volunteer basis in 2015

Oregon is moving ahead with plans to institute a miles driven tax rather than a gasoline tax:

The program, springing out of a recently signed bill, is expected to launch in 2015 on a volunteer basis. But it’s charting relatively new territory, and other states aching for additional tax revenue are sure to be watching closely to see whether to imitate the model…

Oregon is purportedly considering several tracking methods for the pilot project’s 5,000 volunteers ahead of the 2015 start date – essentially allowing them to install mileage meters connected their vehicles’ odometers or GPS systems that could better track non-taxable miles on private and out-of-state roads…

A state spokeswoman said Monday that the project is still in the development stages with officials focused on public awareness, not registration.

Still, she acknowledge residents with electric cars, who pay no gas taxes, “won’t be running to sign up.”

As the article suggests, this is likely to be unpopular for a number of reasons including cost and privacy. However, I haven’t seen any other proposals for how to continue to maintain roads if cars continue to be more fuel efficient. Another option would be to raise the gas tax but no one would like that either. The roads have to be paid for somehow.

Perhaps the key would be to show people that they would be paying a similar amount through the gas tax or the miles driven tax. If the numbers are comparable for many people, it is just replacing one tax with another rather than adding on a new tax. But, the two taxes are based on two different things.

Oregon testing out five different ways to pay vehicle-miles traveled tax

The state of Oregon is currently running a small test program with five different ways of paying a vehicle-miles driven tax:

The new usage charge pilot program, which began in November and runs through the end of this month, involves about 40 volunteers from state government. Participants chose the tracking plan that best fit their privacy tastes and will pay 1.56 cents for each mile driven — receiving a credit for any gas tax paid during the test period. The idea is to make sure each tracking option works in practice…

The five tracking plans vary in terms of oversight. Two are managed by the Oregon D.O.T., three by a third-party vendor. They also vary in terms of payment: some require setting up an online account tied to credit or debit information, others go the old fashion route of monthly bills payable by check.

The key difference is the tracking system. Two advanced plans track mileage data as well as movement with a G.P.S.; the advantage here is that users aren’t charged a fee for driving on private or out-of-state roads — only public roads in Oregon. Two basic plans involve an odometer-type device that collects mileage data but has no G.P.S. to track movement. Users may end up paying a little more, but they’re getting privacy in return.

The most primitive plan, for people who want the most privacy, uses no tracking device at all. Users pre-pay a flat fee that assumes a monthly mileage. At some point, say when the car gets official inspections, the odometer is checked and the difference between miles paid and miles driven is reconciled…

Despite these cautions, Oregon is preparing to take its system public soon. The state legislature has prepared a bill that would implement a V.M.T. fee on all vehicles getting 55 miles per gallon or better. (The change only applies to car models beginning in 2015, however, and as currently written the law wouldn’t go into effect until that year.) Olson says the bill will be introduced sometime in 2013.

It sounds like this small test is more about finding about which of the five options are doable and/or appealing, mainly on the dimension of privacy, rather than asking whether a vehicles miles tax should be implemented at all. As the article notes, a bill will come up this year to start the ball rolling. If this is the case, why not run a test bigger than 40 state employees?

Another thought: the system is set up so that drivers only pay for driving on Oregon’s public roads. Wouldn’t a comprehensive system of driving tax collection have to account for driving in other states?

In defense of Portland

Mark Hemingway takes aim at Portland, Oregon in a long cover story in the Weekly Standard:

Unlike the New York Times, I write not to praise the place but to note the litany of things that plainly have gone wrong. Also to alert anyone else who’s listening: Right now, America’s civil and social engineers are beavering away trying to turn your city or town into the next Portlandia.

Mark’s piece is a rambling barrage that roughly summarizes as follows:

  1. Portland gets a lot of attention from the media, particularly the New York Times and via the TV show Portlandia (paragraphs 1-14).
  2. Portland is crazy-town (“quietly closing in on San Francisco as the American city that has most conspicuously taken leave of its senses”) (paragraphs 15-20)…
    1. …because of its development policies, particularly light rail (paragraphs 21-37);
    2. …because of its “generally hostile business climate” (paragraphs 38-53); and
    3. …because of its lax sexual mores (paragraphs 54-84).

A few thoughts re: development policies.  Mark suggests “[t]hings began to unravel in 1973, when the Oregon legislature required cities in the state to set development boundaries with the goal of preserving farmland.”  Portland responded by “cancel[ing] a major interstate freeway project” in order to start a light rail system.  Mark objects to this decision because (a) the light rail has low ridership (“It’s called ‘light’ rail not because the trains are less heavy, but because it’s more lightly used by the public than, say, New York’s subway or Washington, D.C.’s Metro”) and (b) it allowed “Oregon’s integrated land use and transportation planning system [to be] manipulated to award [a former-politician-turned-consultant’s] clients hundreds of millions in state and city contracts relating to light rail expansion and the accompanying high-density developments.”

While I’m certainly no expert on either Portland or light rail ridership statistics, a cursory web search turned up this Wikipedia article suggesting that Portland’s system ranks 4th in ridership among similar U.S. systems and ahead of (much larger) cities such as San Diego (5th), Philadelphia (6th), and Dallas (7th).  And as far as the revolving door between local politics, consultancies, and developers goes, it strikes me that this is a problem that has little to do with light rail as such.  The placement of new roads and highways is similarly susceptible to backroom-dealing that favors the wealthy and well-connected.  Mark makes no effort to explain why corruption (whether of the “small-c” or “big-C” variety) poses a bigger or more inherent problem with publicly funded mass transit projects (e.g., light rail) than with publicly funded car-based projects (e.g., highways), and I fail to see an argument so obvious that it needn’t be even implied (let alone spelled out).

A few thoughts re: Portland’s “generally hostile business climate.”  Mark begins by quoting extensively from a 2010 op-ed written by the chairman of Nike, a company started and headquartered in Portland, which opposed an increase being considered in the state income tax.  Whatever the merits or demerits of the tax increase or this two-year-old op-ed, it is hard to understand why Mark cites this as his leading example of Portland’s hostile business climate in particular rather than Oregon’s in general.

Worse, this op-ed is the closest Mark comes to criticizing Portland directly.  In the subsequent paragraphs, he (a) tells the story of his own grandparents as an example of the “upwardly mobile, working-class life now seems out of reach for much of the city,” (b) notes that income is unevenly distributed in Portland (“Don’t tell Portland’s scabies-infested Occupy camp, but between 1980 and 2007, the share of wealth earned by Portland’s middle quintile declined by about 20 percent, while the top 1 percent’s share doubled”), and (c) rises to defend “the traditional working class” from “the new hipsters.”

  • (A), the fact that the WWII generation could be both “upwardly mobile” and “working-class” is well documented, as is the fact that similar opportunities are vanishingly scarce for younger America today.  While I am certainly happy for Mark’s grandparents, it’s hard to imagine that today’s public school teacher and bus driver will, in 35 years, “retire to a farm…[and] rais[e] quarter horses.”  And it’s not likely that choosing to live in Peoria rather than Portland will make any difference.
  • (B), the fact that income is unevenly distributed in Portland only proves that Portland is normal relative to the rest of the U.S., not that it is a statistical outlier.  Moreover, without further explanation, it is unclear why Mark thinks uneven wealth distribution contributes to a “generally hostile business climate.”
  • (C), as his sole example of hipster-on-working-class attacks, Mark cites a five-year-old Willamette Week article which makes reference to “drunken red-neck[s].”  Apparently, Mark did not read the prologue to the article, which clarified that it was a humorous “series of bitter, petty, pessimistic rants that generally s**t on everything—and hopefully poke holes in the Portland hype” in order to “persuade prospective Portlanders not to crowd out our way of life for a little longer.”  Whatever one thinks of this brand of humor, it’s as surprising as it is clear that Mark missed this context and tone.

One final note.  Mark does begrudge respect to Portland’s small businesses, though he apparently can’t resist a few barbs:

While it’s hard not to root for entrepreneurial initiative wherever you find it, in Portland it carries a whiff of desperation. I submit that the real reason Portland has a thriving artisanal economy is that the regular economy is in the dumps. Portland’s hipsters are starting craft businesses in their garages and opening restaurants not merely because they “reject passive consumption” but because they can’t find jobs, the kind that offer upward mobility.

Perhaps Mark should re-read that 2010 op-ed he cited.  Before Phil Knight was a multi-billionaire and the chairman of a Fortune 500 corporation, he was just another small business owner with “a whiff of desperation” about him:

Forty-six years ago [as of 2010], when Mark Hatfield was governor, I started a small business in Oregon. In our first year, sales totaled $8,000. I am proud that [Nike] eventually became a major employer in the state.

It has been my hope that other entrepreneurs would similarly pursue their dreams in Oregon.

Today, across the U.S. and not just in Portland, “the regular economy is in the dumps” and people “can’t find jobs, the kind that offer upward mobility.”  If “a small city like Portland” has enough entrepreneurs to open “671 food trucks”, I say we should encourage them.  The last thing we need is for the supposedly conservative Weekly Standard to ape the Willamette Week in its quest to publish “series of bitter, petty, pessimistic rants that generally s**t on everything.”