IT'S NOT HOW CARS GUZZLE, BUT HOW FAR.

Byline: David Steves The Register-Guard

Larry Gunn takes satisfaction in driving a super-efficient hybrid car that emits minimal pollution and curbs his dependence on foreign oil.

And with today's high gas prices, his hybrid saves him thousands of dollars in fuel costs.

"I try not to feel too superior about it," said the 71-year-old Eugene resident, who can drive his Toyota Prius for a year on 220 gallons of gas - a fraction of the 1,100 gallons a Ford Excursion will go through to cover the same 12,000 miles.

But every gallon of gas that Gunn avoids buying means 24 cents in gas taxes the state won't get. And as more motorists conserve fuel, Oregon's unrealized gas taxes are likely to reach the tens of millions of dollars a year.

Given the central role of gas tax money in funding highway improvements, that trend worries Oregon officials. And it has prompted them to launch a nationally watched experiment with a tax based on miles driven instead of gasoline consumed.

Starting Thursday, 20 volunteers began driving cars equipped with technology that tracks their miles driven and uses short-range radios to send the data to the Oregon Department of Transportation computer system.

The month-long testing period in Salem will be followed by a yearlong test with 280 Portland participants using the technology to actually pay this new "vehicle milage tax" in place of the state gas tax when they fill up at participating gas stations.

Initially, the yearlong test was to have been done in Eugene, but officials were unable to line up local gas stations to participate.

The experiment, the first of its kind in the nation, has raised many concerns. These range from complaints that it would be unfair for those driving fuel-efficient cars, to fears that government would use satellite technology to track citizens' movements.

Even the program's chief advocate, State Sen. Bruce Starr, R-Hillsboro, said it's unlikely lawmakers will adopt the mileage tax as a replacement for the gas tax.

"It's got significant hurdles at almost every level," said Starr, who led the legislative effort to create the test program.

Despite such misgivings, the test moves ahead, using $3 million in federal and state funding.

Gas tax punishing

James Whitty, an Oregon Department of Transportation administrator in charge of the pilot program, acknowledged that the gas tax has evolved into a levy that does a good job of punishing those with the most gas-guzzling, pollution-spewing rides and rewarding those who conserve fuel and limit harmful auto emissions.

"What it does a terrible job of is raising revenue needed to maintain the road system - which was its original objective," Whitty said.

For its first 50 years, the tax system evenly matched road use with taxes paid, he said. Through the 1960s, most cars and light trucks all got roughly the same gas mileage: 9-12 mpg. By the 1970s, car makers stepped up production of more fuel-efficient vehicles, and Oregon gas tax receipts began to flatten, forcing the Legislature to raise the tax rate every few years in order to keep up with demand for road projects that was caused by increased traffic.

Lawmakers raised the tax from 7 cents in 1981 to 24 cents today. Still, those increases didn't keep pace with inflation.

Since 1998, Oregon's gas tax receipts have flattened, ranging between $390 million (in 2001-02) and $385 million (2003-04) - even though the state has added 500,000 more licensed drivers and 300,000 more passenger vehicles in the past seven years.

ODOT officials said that's due to increasingly fuel-efficient vehicles. Projecting ahead to even greater efficiencies, ODOT estimates that by 2015, highway fund revenues will fall short by a cumulative $69 million of what they would be if fuel economy remained at today's levels. That gap would reach $402 million by 2023 - unless the Legislature raised gas taxes or found another way to pay for roads.

Hoping to avoid a future of politically unpopular gas tax increases, the 2001 Legislature created the Road User Fee Task Force to look at alternatives to the gas tax that would link drivers' use of roads and the amount of taxes they pay for road work. The project is being funded with a $2.16 million grant from the U.S. Highway Administration and $770,000 from the state Highway Trust Fund.

The project's designers say they've addressed many technological hurdles in the past four years - a big reason the on-the-road testing is proceeding a year behind schedule.

But political problems are looming: fears of privacy invasion by the government; higher costs for gas stations to collect a new tax; and the prospect of shifting the tax burden away from owners of gas guzzlers and onto owners of fuel-efficient cars.

"I don't know that (the mileage tax) is the answer to the question. That's the bottom line," said Sen. Starr.

GPS monitoring feared

Each vehicle subject to the mileage tax would be equipped with a global positioning system (GPS) unit, which uses satellite signals to triangulate its precise location. This has raised fears the government could track private citizens' movements.

David Kim, a professor with the Oregon State University Department of Industrial & Manufacturing Engineering, said he and others involved with the Oregon pilot project have ensured the technology could not be used that way.

Although the GPS unit receives satellite signals to determine its location, such data cannot be recorded or transmitted, Kim said. Rather the device only will be used to determine if a car is in Oregon - when the mileage tax would apply - or out of state, when it would not, he said. Also, the unit would show if the car was in an urban area during rush hour, so that a higher per-mile "congestion pricing" tax rate could be applied.

Andrea Meyer of the American Civil Liberties Union of Oregon said the ACLU's national technology experts have studied Oregon's project and remain convinced it could compromise citizens' privacy. "It's our belief that there are no safeguards that can be put in place when you are starting to talk about tracking people and using GPS," she said.

Practical hurdles cited

Other skeptics question the practicality of vehicle mileage taxing. They cite the potential costs and bureaucracy needed to equip cars, guard against tampering and perfect the technology to prevent billing errors.

Increasingly, however, cars are coming off the production lines with the necessary equipment already on board, said ODOT's Whitty. One the two major elements - on-board diagnostic computers - have been built into cars since 1996.

The other required device - a GPS unit- is increasingly common on new cars. That makes Whitty confident that by the time the Legislature is ready to make a decision - which would happen in 2009 at the earliest - retrofitting won't be necessary.

Drivers of the thousands of cars in Oregon without the technology that would still travel Oregon roads would continue to pay the gas tax, as would anyone who illegally disabled his car's vehicle mileage tax equipment in an attempt to avoid paying the tax, Whitty said.

Environmental affront

The idea of dumping the gas tax has rubbed environmentalists the wrong way. One of them is Gunn, the Eugene owner of a 2001 Prius.

Gunn's gas-electric hybrid gets 45 mpg, which means it will produce about $65 a year in gas taxes if it covers 12,000 miles.

The driver of a 10-mpg Hummer will fork over $288 in Oregon gas taxes to cover those same miles.

But with a vehicle mileage tax at a flat rate of 1.25 cents, which the state is considering, both would pay the same: $150.

"I don't like the idea that they don't penalize the gas guzzlers," said Gunn, who helped found the Eugene-based Institute for Sustainable Ethics and Economics. "That doesn't seem fair."

Whitty, the ODOT manager, said that while such issues aren't taken into account in the pilot project, a mileage tax could take such concerns into account by imposing a higher rate for low-efficiency, high-emissions models.

The Legislature would likely examine those issues if it decided to pursue the project further, he said.

Joe Cortright, an independent Portland economist who's not involved with the vehicle mileage project, said tax fairness for drivers isn't just about fuel consumption and auto emissions. It's also motorists paying their fair share for using the roads.

Cortright compared the state's network of roads and bridges to the mobile phone system, in which customer rates are low or free when the cellular communication network isn't being overly burdened - nights and weekends - but high during weekdays when usage peaks.

Cortright said a vehicle mileage tax with a peak-hour surcharge would work the same way, ensuring that those who drive up the demand for added freeway lanes, bridges and bypasses - rush-hour motorists in congested areas - shoulder their burden.

"People who use something should pay for it," he said. "and the expensive part of the road system is its use at peak hours."

Rolling out savings or more expense

Under the vehicle mileage tax program being tested by the state, all vehicles would pay about 1.25 cents per mile. Someone who drives 15,000 miles a year would end up paying $188. Here's what drivers of four different vehicles pay under the current 24-cents-per-gallon gas tax, and how much they would save or lose under a mileage tax if they drove 15,000 miles a year.

HONDA CIVIC HYBRID 

48 miles per gallon 

$75 in current annual state gas taxes

Under the mileage tax,

the driver would pay $113 MORE

VOLVO XC70 WAGON

21 miles per gallon

$171 in current annual state gas taxes

Under the mileage tax,

the driver would pay $17 MORE

CADILLAC ESCALADE SUV

15 miles per gallon

$240 in current annual state gas taxes

Under the mileage tax,

the driver would pay $52 LESS

DODGE RAM PICKUP

11 miles per gallon

$327 in current annual state gas taxes

Under the mileage tax,

the driver would pay $139 LESS

Sources: ODOT, EPA