OR officials want to tax fuel-efficient cars

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by Shelby Sebens, Northwest Watchdog

PORTLAND — While the federal government hands out tax credits for high-mileage cars, the state of Oregon may ask owners of hybrids and electric vehicles to pay more.

When the legislature convenes in February, lawmakers will consider taxing eco-friendly vehicles, ones that get 55 miles per gallon or more, based on how much you drive.

Their logic: electric and other fuel-efficient cars aren’t paying the state tax on gasoline (which you pay when you pump) and therefore aren’t contributing to road construction and repair.

“They’re getting a free ride,” said state Rep. Vicki Berger, R-Salem. She said the state’s road fund cannot keep up by relying on the gas tax, which is 30 cents per gallon. The irony is rich, though, especially in a place like Oregon where the official state color may as well be green.

Saving money at the pump could cost drivers down the road. Lawmakers want to tax fuel-efficient drivers.

“What’s really happening: It’s two different, competing government priorities,” said Gloria BergquistAlliance of Automobile Manufacturers vice president. On the one hand, you have energy security and environmental officials who want to incentivize the oft-pricier electric and hybrid vehicles. On the other hand, you have officials hit with the costs of fixing roads.

Bergquist said the auto organization opposes a per-mile vehicles tax, especially on fuel-efficient cars, which aren’t selling as well as they’d hoped.

Hybrids, which went on sale in 2000, still make up only 2.5 percent of all auto sales in the United States, she said.

“For many people, you’re taking away the incentive for them to buy this vehicle,” she said of the per-mile tax. “Generally a tax scares people.”

But taxing the greener cars is just the first step toward changing the revenue stream for roads, Berger says.

“It certainly is an arrow to the future because those of us who look into the future see you just can’t keep raising gas taxes,” Berger said. “That just won’t pay the bills for our highways.”

But don’t get too excited. That doesn’t mean bye-bye gas tax.

“At some point you’re going to have to have a duel system,” Berger added.

John Charles, president and CEO of the Cascade Policy Institute, argues Oregon doesn’t have a gas tax revenue problem, but rather a spending problem.

“In the big scheme of things though, this topic is a sideshow,” he said in an email. “The governor’s proposal to raise taxes by $450 million to pay for our share of theColumbia River Crossing boondoggle is one of the biggest policy issues of the entire 2013 session. Until the state stops wasting money on absurd projects such as CRC, light rail, and so-called ‘high-speed rail,’ there is no point worrying about getting more money from motorists.”

Charles, who served on the state’s Road User Task Force from 2001 to 2010, also said it makes more sense to impose a fee for studded tires. “There is no doubt that studs are one of the two leading causes of road wear (along with heavy truck axle-weights, which are heavily taxed already),” he said.

Jody Wiser, policy advocate for Tax Fairness Oregon, agrees with that notion, but thinks the tax per-mile on high-efficiency vehicles makes sense.

“Clearly, if we’re going to use roads, we have to have them be serviceable,” she said. “As we increase fuel efficiency we decrease the amount of money for highways and roads and it makes perfect sense to me.”

The details of the legislation are still being worked out, including how much the tax would be and how the government would track mileage.

“It’s pretty obvious there’s going to be an app for that,” Berger said. Many are opposed to any kind of GPS tracking system that would mean big brother is looking over your shoulder.

Wiser argues the grace time for incentivizing drivers to buy fuel-efficient vehicles is up.

“The agenda is well pushed in states like Oregon and California,” she said. “It’s time for everybody to pay their share.”

The auto industry, which has invested billions in fuel-efficient technology, disagrees.

“We want to do everything we can to encourage consumers to buy these vehicles,” Bergquist said.

Northwest Watchdog is a project of the Franklin Center for Government & Public Integrity

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Posted by at 05:00 | Posted in State Taxes, Transportation | 31 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bob Clark

    Commuter rail projects should be cut off from the gasoline tax revenue pot, and from any future public road mileage tax revenue pot; and there would consequently be more monies for a light-rail-less CRC expansion. The height problem with the CRC would maybe be more easily solved too without the light rail element. Actually, the CRC expansion should be shelved in favor of a new west side bypass toll bridge and road system, bringing in private capital in a regulated toll model.

    As for the green aspects of gasoline powered vehicles, I don’t think there is much of a case of taxing their emissions as they are becoming so efficient even Washington state is pulling its DEQ vehicle monitoring stations. The few badly maintained cars, spewing blue smoke, could be more effectively cared for by police monitoring and enforcement.

    If Oregon state wants to do more to combat its perceived carbon dioxide problem, it really should walk its talk first and manage its forests better so as to stop them from burning down so frequently; or at least demand and work, to get the federal forest fires reduced sharply. We need to be a more productive peoples again by growing more trees and harvesting them into lumber which sequesters the over-hyped, government dreaded CO 2 element (which is largely a Trojan horse to usurp more power to government and away from free spirited, resilient individuals).

    • DavidAppell

      Do you think CO2 doesn’t absorb infrared radiation, or that the Earth doesn’t emit it? So how then is it part of a conspiracy?

  • Tyschev

    Our tax system needs a serious overhaul. People really need to keep in mind where a problem comes from, not just the “popular” thing to get themselves attention. Studded tires have a negative effect on the roads almost instantly when they are ‘legal’ to install. Put the payment with the problem. Stud alternative soft rubber tires are amazing these days, I still think much more effective than studs ever were. Besides the simple basics they get plenty of money to fix roads, it just gets squandered away like every other tax dollar. We get taxed (a lot) when making money, again when buying most anything. Even food has a tax cost because of everything is taxed in production and transportation. The government at all levels needs to start thinking about spending reductions, and quickly. Revenue streams are changing quickly and no one is going to agree to 50% of income taxed because the government lost other revenue streams. We cut back, it is time they do the same.

  • guest

    Chee, let’s all get in line with the Dem planet of cAPESleeze – enter sound of Kookaburra calling you like 3H, VP, David Appell, eat all along with the the other resounds of left bling jackassublimity d’oh bawls.

  • http://www.facebook.com/burton.keeble Burton Keeble

    Hey, Salem, tax me.
    Tax me for my wind and rain
    Tax me ’til I can’t get up again,
    Hey, Salem, tax me.

  • Dantheman

    (If you drive a car ), I’ll tax the street,
    (If you try to sit ), I’ll tax your seat,
    (If you get too cold ), I’ll tax the heat,
    (If you take a walk ), I’ll tax your feet.
    Taxman.

    ~George Harrison

    • DavidAppell

      So how do you propose paying for the roads you want to drive on?

  • Mike

    These fools should and will pay higher taxes as they are getting a free ride by not buying as much fuel. Finally, a tax we can all agree on!

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