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Mileage Tax Fairer Than Petrol Tax

Mileage Tax Fairer Than Petrol Tax

Terrapass, one of Cityhop’s favourite sites for good ideas on being more sustainable recently had a blog on  a milage tax  - a system of charging per kilometre instead of a tax on petrol at the pump as a way to fund transportation infrastructure.

Oregon (a very progressive state -eg. they limit parking at arenas to encourage public transport use) recently conducted a successful experiment  with a milage tax. Years ago they recongised that as cars got more fuel efficient their gas tax revenue would decrease affecting transportation budgets. 28 different funding mechanisms were explored before the milage tax was chosen because of its fairness, ease of implementation, efficacy, public acceptance, and much more. In 2006 299 volunteers trialled a system that linked with the existing gas tax.

A GPS recorder in participants’ cars tracked the miles driven. When they filled at gas stations a wireless scanner at the pump detected the receiver and recorded the car’s milage and sent it to a central database to calculate miles driven since last payment.

It’s a bit like the diesel tax we have here in New Zealand.

Anyway the  Oregon Department of Transportation did a report that indicated the trial was a success. The overheads were low and payment was simple. Privacy was protected - the only information gathered was miles driven.

Drivers were intrigued to see the miles they covered. Sadly despite the success ot the trial it isn’t expected to be fully operational says the ODOT until 2040? Why wait if it works? Cityhop, NZ’s first car share is hoping that there will be very few drivers with their own cars by 2040 and that the concept of sharing will be seen as the most environmentally sustianable option IF you have to drive!

Anyway getting back to the tax, curiously participants preferred this system to paying a gas tax. During the experiment it was modified and some  of the control group had to pay a flat per mile fee while others paid a congestion tax for travelling in peak times in the Portland area. This was separately itemised. Guess what - participants reduced their driving!

Anecdotally, many participants, Terrapass reported, changed their driving habits in response to GPS milage displays in their cars.  One person commented  that she began to walk to neighbourhood places when she saw how short the journey was from her home. Those who paid the congestion tax were most changed - they dropped their peak hour driving by 22% compared to the other control group who didn’t pay it so didn’t know about it. They also drove less - which bears out what car share companies say - people drive less once they become car share members.

Finally, the report notes, the system could provide a powerful tool to “metropolitan planning organisations looking for fair and stable menas to fund regional plans, manage growth, contain air pollution and support better land use decisions.

We could do this fairly simply in New Zealand now. Many of us have 6 monthly WOF checks, the milage we had driven could be noted at this point and we could pay a milage tax or choose to pay as you go. It might focus our attention a bit more on our journeys the same way when petrol prices go up we focus on our car use.

If we want to get serious about reducing car use some of these initiaitves have to be given serious thought.

BY the way, Oregon now faces a $10 billion shortfall for transportation financing. Sound familiar! Earlier this year the Govenor called for statewide implementation of a milage tax - watch this space. Click on the link and read the LA Times on this progressive state and the thoughts of its Democratic and forward thinking Govenor.

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