Oregon recently hit an exciting milestone, registering more than 100,000 electric vehicles (EVs) on the road. Governor Tina Kotek celebrated this as a major achievement toward the state’s climate goals. However, as the state embraces more electric cars, a new challenge is emerging for Oregon’s transportation system.
The state’s current transportation system is funded largely through a 40-cent-per-gallon gas tax. But as more Oregonians switch to electric vehicles, the gas tax revenue is dropping. Electric cars don’t use gasoline, and therefore, don’t contribute to the gas tax. While electric vehicle owners pay higher title and registration fees compared to gas-powered cars, the overall amount they pay still doesn’t match the contribution of gas-powered car owners through fuel taxes. This is leaving the state with a shortfall, estimated at around $1.8 billion annually, to fund essential road and infrastructure projects.
Rising Costs and the Need for Change
The situation has been made worse by rising construction costs due to inflation, and lawmakers are now scrambling to figure out how to make up for the lost revenue. With electric vehicles making up about 5% of cars in Oregon over the past decade, state lawmakers are considering a new solution to generate revenue. They are now looking to expand the “per-mile” charge for electric cars as a more sustainable way to fund transportation needs.
In 2015, Oregon became the first state to launch a voluntary program called OReGO, which allows electric vehicle owners to pay a per-mile charge in exchange for lower DMV fees. However, despite being introduced over seven years ago, OReGO has seen limited participation, with fewer than 1,000 drivers enrolled in the program.
The state is now seeking ways to expand this program, making it more widely accessible to electric vehicle owners. Jim Whitty, a transportation policy expert and former OReGO developer, spoke to the Joint Transportation Committee, explaining that a road usage charge is necessary to tie road usage directly to the cost of maintaining roads. According to Whitty, this system worked well when the state relied on fuel taxes but needs an update to accommodate the shift toward electric vehicles.
OReGO Program and Its Limitations
The OReGO program was designed to allow electric vehicle owners and drivers of fuel-efficient cars (those getting 40 miles per gallon or more) to participate in a per-mile charge, which helps lower their DMV fees. For instance, electric vehicle owners pay $192 to title their cars, while regular car owners pay between $101 and $116. Additionally, electric vehicle drivers are required to pay $316 for two-year registration, compared to between $126 and $156 for other vehicles.
However, OReGO participants who sign up for the program can reduce their registration fees to as low as $86, a significant savings. Drivers who choose to participate are required to track their miles through GPS tracking, odometer readings, or their car’s built-in computer. The program works by charging drivers for the miles they drive, with fees adjusted based on the miles driven out of state.
Tim Martinez, a lobbyist for GeoToll, one of the companies that manage the OReGO system, shared that the automatic billing system in place works well. Martinez, who drives an electric vehicle and is enrolled in the program himself, believes that expanding this system is a fair and effective way to deal with the challenges Oregon faces in funding its transportation system.
Looking Toward the Future
As more electric vehicles are sold and adopted across the state, lawmakers are under increasing pressure to create a more sustainable system of funding transportation infrastructure. With the state’s gas tax revenue shrinking and rising road construction costs, the expansion of the OReGO program could be a crucial step in ensuring that Oregon’s roads remain well-maintained.
The state’s lawmakers are eager to find a solution that’s both equitable and effective in addressing the state’s transportation needs. The OReGO program, which was designed as a voluntary initiative, may now become an essential part of Oregon’s long-term transportation strategy, ensuring that both electric and gas-powered vehicle drivers contribute fairly to the state’s infrastructure.
In conclusion, while Oregon’s achievement of registering over 100,000 electric vehicles is a win for its climate goals, it also highlights a significant challenge in the state’s transportation funding model. As lawmakers look for ways to address this shortfall, expanding the per-mile charge for electric vehicles could be a key solution to ensure that the state’s transportation infrastructure continues to be well-funded and sustainable in the long term.
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