The encyclopedia · Strategy & Leadership · Strategic decision · 2015–2017
Oregon's OReGO charged drivers per mile, not per gallon of gas
In 2015 Oregon launched the nation's first mileage-based road fee: volunteers pay 1.5 cents per mile and get credit for the gas tax they paid.
Oregon Department of Transportation (ODOT)
the move
Oregon's fuel tax revenue kept shrinking as cars became more efficient and hybrids and electric vehicles paid almost nothing for the roads they used. After two pilots, the legislature authorized a statewide per-mile charge, and OReGO launched on July 1, 2015 — the nation's first major mileage-based user fee.
Volunteers pay 1.5 cents per mile; a device in the car reports mileage, and drivers receive a credit for the 30-cent-per-gallon gas tax they paid at the pump, so they are not double-charged. Enrollment is capped at 5,000 vehicles across fuel-efficiency bands.
Three private vendors run billing; two use GPS tracking, and one offers a basic non-tracking device that only reports miles and fuel use — a design choice that gave drivers a privacy-preserving option.
why it works
- Per-mile pricing matches payment to road use as fuel efficiency erodes the gallon base.
- The gas-tax credit avoids double taxation and made the pilot politically acceptable.
- Private vendors with a non-GPS option addressed the privacy concern head-on.
- A volunteer pilot let the state test the mechanism before mandating it.
what transfers
When the old tax base erodes, price the actual service: metering miles keeps funding fair and future-proof, and offering a no-GPS option answers the privacy objection before it kills the policy.
what came after
Every state watched the pilot; Oregon later expanded road usage charging studies, and per-mile pricing became the reference design for replacing fuel taxes as electric vehicles spread.
references
- ODOT Launches Program That Could Replace Gas Tax
- Nation's First Test of Mileage-Based Roadway Fee System Under Way in Oregon
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