As fuel taxes plummet, states weigh charging by the mile instead of the tank

Evan Burroughs has spent eight years touting the virtues of an Oregon pilot program charging motorists by the distance their vehicle travels rather than the gas it guzzles, yet his own mother still hasn’t bought in.

Margaret Burroughs, 85, said she has no intention of inserting a tracking device on her Nissan Murano to record the miles she drives to get groceries or attend needlepoint meetings. She figures it’s far less hassle to just pay at the pump, as Americans have done for more than a century.

“It’s probably a good thing, but on top of everybody else’s stress today, it’s just one more thing,” she said of Oregon’s first-in-the-nation initiative, which is run by the state transportation department where her son serves as a survey analyst.

Burroughs’ reluctance exemplifies the myriad hurdles U.S. states face as they experiment with road usage charging programs aimed at one day replacing motor fuel taxes, which are generating less each year, in part due to fuel efficiency and the rise of electric cars.

The federal government is about to pilot its own such program, funded by $125 million from the infrastructure measure President Biden signed in November 2021.

So far, only three states — Oregon, Utah and Virginia — are generating revenue from road usage charges, despite the looming threat of an ever-widening gap between states’ gas tax proceeds and their transportation budgets. Hawaii will soon become the fourth. Without action, the gap could reach $67 billion by 2050 due to fuel efficiency alone, Boston-based CDM Smith estimates.

Many states have implemented stopgap measures, such as imposing additional taxes or registration fees on electric vehicles and, more recently, adding per-kilowatt-hour taxes to electricity accessed at public charging stations.

My 26 year career with the Oregon Department of Transportation was in the unit that handled the per-gallon fuels tax, which basically applies to vehicles that aren’t commercial trucks. Those pay a weight-mile tax and were handled by a different department, but we had overlap. The trucks fill their tanks at commercial pumps and don’t pay tax on it at that time. Their companies track the distance the trucks drive on Oregon roads, and what weight they are while doing it. That information is then translated to the tax due the state, which they pay once a month.

Obviously this wouldn’t be nearly that complex but we need to look at something. With mpg getting better and better and the addition of electric vehicles the per gallon tax just isn’t going to cover what it used to. We still need roads maintained. So I’m cool with this (ignore the fact that I can’t drive anymore). What is your input?