Putting more fuel-efficient vehicles on the road is universally seen as a good thing, but those gas-sipping hybrids and electric cars crisscrossing Colorado are contributing less and less in terms of the gas tax revenues that pay for badly-needed road and bridge repairs across the state.
Starting in December, state transportation officials will launch a program to test a new way to raise funds that could one day eliminate the need for the state’s 22-cent per gallon gas tax, which hasn’t been adjusted upward in more than two decades: Make motorists pay for every mile they drive.
The Colorado Department of Transportation’s Road Usage Charge Pilot Program will recruit 100 volunteers to track how far they drive and then “pay,” in theory, 1.2 cents per mile for their use of the road. No money will actually change hands, but CDOT hopes to get a sense of how such a system would work in terms of mileage reporting and revenue collection.
“It would be similar to electricity and water — you pay for what you use,” said Amy Ford, a CDOT spokeswoman. “This is about fairness.”
Colorado’s share of fuel tax revenues has stagnated over the past decade, totaling $475.7 million in fiscal year 2015 — up only a fraction from the $446.7 million the tax brought in five years ago. As long ago as 2007, the tax was generating $480.2 million annually, according to the Colorado Legislative Council.
Ford calls the levy at the pump a “dying tax,” as it isn’t adjusted to keep up with inflation and the increasing cost of construction year over year. More fuel-efficient vehicles — and electric vehicles that use no fuel at all — are only compounding the problem, she said.
“That level of fairness about how we’re using the road is going away,” Ford said.
But the per-mile model, which CDOT will test for four months, isn’t without its challenges.
How do you get drivers to reliably and accurately record their mileage? What happens when someone drives out of state or someone from out of state drives here? And what are the privacy implications of having mileage tracked?
CDOT says it will offer three basic ways for drivers in the pilot program to track mileage: reporting and recording what the odometer shows or plugging a device into their car that tracks mileage — with GPS capability or without.
Mike King, of Arvada, understands the problem of lackluster fuel tax revenues and the resulting impact on CDOT’s ability to fix the roads. But he worries about having his whereabouts being potentially monitored under such a system.
“I would want a device in the car without GPS,” he said. “I don’t want them tracking where I’m going.”
He also finds it a tough sell that drivers of more fuel-efficient vehicles — King owns a Prius — would essentially be penalized by the per-mile model because his charges under that system would exceed what he pays now in taxes at the pump.
“You want to do the right thing,” he said. “But I want to continue paying at the pump.”
Oregon, which was the first in the nation to pilot a per-mile tax program starting last year, broke down the the yearly cost to the drivers of a 2014 Prius and a 2014 Ford F-150. The Prius driver would end up shelling out $116 more per year under the state’s 1.5-cent per-mile OReGO system than under its 30-cent per gallon gas tax, while the pickup truck driver would get a $21 annual break going to the new system.
Ford acknowledged that drivers of cleaner cars could be seen as subsidizing the drivers of more polluting vehicles under the per-mile system. But as fuel-efficiency standards increase for all vehicles over time, she said that differential will flatten out.
“We’re looking a little bit at the longer term picture of that,” she said.
And cost is not the only factor that goes into people’s decision to buy a fuel-efficient vehicle, Ford said. She didn’t think the per-mile model would necessarily act as a disincentive to people going green with their vehicle purchases.
Oregon Department of Transportation spokesman Tom Fuller said his state’s pilot program has been well received by the 800 or so volunteers participating in it.
“We get very positive comments back from the users,” he said.
The concern over privacy violations, he said, has largely dissipated as drivers realized they could use a non-GPS enabled device to record their miles traveled.
“It was actually designed so that government doesn’t know the location of the vehicle,” Fuller said.
OReGO has many years to go before it would be fully implemented and a final per-mile tax determined, something Fuller said would have to be done by the state legislature. He said that could still be a decade out.
Carl Davis, research director at the Washington, D.C.-based Institute on Taxation and Economic Policy, said it’s true that state governments will have to find alternate ways of generating revenues for road projects as more cars go hybrid and electric. And he lauds Colorado, Oregon and California for testing the per-mile tax concept for the day when it will be needed.
But he said it may not be the short-term panacea states think it is. He said construction costs since 1990 have risen 62 percent while fuel efficiency has only gone up 17 percent in that period.
“Inflation has been more important than hybrid technology in explaining why tax gas revenues are falling short,” Davis said.
The real solution, at least in the short term, is to index the gas tax to inflation, as has been done in six states. Georgia last year did something even better, he said. Lawmakers there passed legislation that links the gas tax rate to inflation in highway construction costs and to shifting fuel efficiency standards.
“I think there’s value in charging drivers for their use of the road,” Davis said. “But it’s important not to get ahead of ourselves. I think the gasoline tax has a lot of promise — it is just badly designed.”
