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Selling OReGO: Oregon’s Road User Charge Program One Year Later

September 23, 2016

This news post appeared in: Summer 2016 issue of MBUFA’s e-Newsletter

It has been just over a year since the launch of OReGO, Oregon’s first-in-the-nation road user charge program that charges drivers a tax based on miles driven rather than fuel consumed.

Senate bill 810 enabled ODOT to sign up 5,000 volunteer cars and light-duty trucks and charge them each 1.5 cents per mile. Drivers log on to the OReGO website to register, choose from one of three account managers and opt to have their mileage recorded by a plug-in on-board diagnostics device, which may or may not be GPS-enabled. Participants receive a credit on their bill to offset the fuel tax paid at the pump.

Eventually, the Beaver State would like to replace the fuels tax with a statewide road user charge but this depends on how well OReGO works. Since fuels tax revenues continue to dwindle due to more fuel-efficient and electric vehicles on the road, officials need to demonstrate that charging by the mile instead of at the pump makes more sense.

So with the program’s one-year anniversary completed, Maureen Bock, ODOT’s program manager for OReGO, provided an assessment of where things stand.

Here are the main takeaways:
Participation in the program has been far less than the maximum allowed

The OReGO program was designed to accept up to 5,000 participants. As of the end of June, just 1,025 Oregon vehicles were enrolled. Two factors may explain the low number. Unlike California’s new road user charge pilot which doesn’t cost money, OReGO asks volunteers to pay a new tax so this may have discouraged drivers who may have otherwise participated. Also, there hasn’t yet been much of an active push to market OReGO beyond the signup website thus limiting public awareness and keeping participation relatively low.

The program unexpectedly made a profit

Drivers of low mileage vehicles (22 mpg or lower as defined in the bill) were expected to make up most of the volunteer pool (up to 3000 of the 5,000 participants), resulting in a big tax refund bill for the state. Instead, 75 percent of the participant vehicles were high mileage and the state paid out less money in refunds than they collected in road user charges. The results are remarkable because the current bill does not vary the per-mile rate based on vehicle emissions levels so drivers of fuel-efficient vehicles in the program have to pay while their gas-guzzler-driving peers get a check.

This policy choice may appear skewed but the intent of the program for now appears to be fairness in paying for road use rather than limiting carbon emissions. In this regard, ODOT is ceding responsibility for promoting environmental quality to other state agencies which have this mission by statute.

Bock says that there is anecdotal evidence that some participants with fuel-efficient vehicles felt a need to “pay their fair share.” Although these drivers realize big cost savings on fuel it is unclear if these results will hold up going forward.

Most volunteers liked the program

Midway through the program, close to 500 participants completed a survey run by an outside consultant reporting their overall experience. Results showed that over 70 percent of respondents rated their experience as either excellent or good. Over 90 percent indicated that signing up was simple and straightforward while 70 percent reported that they clearly understood the available options.

The survey also gathered data on participants’ experience with the account managers’ mileage statements and billing. Results showed that the percentage of respondents who thought that the statements and bills they received were clear and accurate were 67 percent and 57 percent respectively.

The survey did not solicit open ended responses from participants and did not attempt to compare experiences among the three different account managers. Participants will be surveyed again and those results will be available later in the year.

OReGO’s managers are getting prepared in case the legislature makes the program mandatory

ODOT has applied for FAST Act funding to further expand and enhance OReGO. Among the proposals are:

These results will allow program managers to report back to the Road User Fee Task Force, which could recommend statewide adoption.

There were no reported unauthorized disclosures of volunteers’ personal information

Opponents of road user charges have long advocated against the distance-based fee concept due to privacy concerns including the potential for officials to use GPS to track driver location and use the data for nefarious purposes. To assuage these concerns, the bill prevented the disclosure of volunteers’ personal information for those using the GPS option and required account managers to destroy all records of the travel patterns of individual drivers after a 30 day period (disclosures to the police during a criminal investigation are allowed).

In addition, vendors were required to sign contracts that included confidentiality provisions with the stipulation that they could face stiff penalties for any violations. By the end of its first year, OReGO avoided any confidentiality violations. Whether this can reassure the public and elicit more participation is left to be seen.

After its first year, the jury is out on whether OReGO will move beyond a small voluntary program to a statewide mandatory one. Legislative action will be required to move in that direction. A lot will depend on public support, revenue forecasts, as well as program results going forward.