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Oregon to Introduce New Car Fees as Gas Tax Is Phased Out

The state’s gas tax is becoming obsolete as more drivers are opting for electric vehicles, which don’t require gas. Oregon now is mixing incentives and higher registration fees to try to make up the money.

(TNS) — January 2020 marks the beginning of a new era in the way Oregon drivers pay for maintenance of their roads and highways.

Fuel-efficient and electric vehicles, which have driven a wedge in recent years into the state’s gas tax-fed Highway Fund, will be subject to increased registration fees approved by the Oregon Legislature that are intended to recoup revenue losses.

“The gas tax is unsustainable,” said Michelle Godfrey, public information officer for the Oregon Department of Transportation’s OReGo program. “As people get more efficient, we’re losing funding for more of the roads.”

Drivers of fuel-efficient or electric vehicles can get some relief from the steepening registration fees by signing up for the OReGO program, in which participants pay a per-mile fee and receive a tax credit for fuel they use. The mix of incentives and increased charges capture the piecemeal manner by which Oregon is attempting to wean itself off of gas-tax funding in the face of emissions reductions and energy efficiency.

“It’s going off the rails,” said David House, public information officer for DMV, Motor Carrier & Transportation Safety.

The increased fees apply to any vehicle whose registration is up for renewal after Dec. 31. Drivers will begin to see the new fees on their renewal reminders starting this month, ODOT announced in a news release.

Paying earlier won’t get you out of the new fees, the department said. The fees are dependent on the renewal date, not the date the fee is paid.

The Oregon Legislature in 2017 approved new registration fees based on miles-per-gallon thresholds. Cars with a fuel economy of zero to 19 mpg will pay $244 for a four-year registration or $122 for two years. Cars that reach 20 mpg to 39 mpg will pay $264 for a four-year or $132 for a two-year registration.

High-mileage vehicles that get 40 mpg or above have two options: a fee of $304 for four years, $152 for two, or, if drivers are enrolled in OReGO, the fees drop to $172 for four years and $86 for two.

Similarly, electric vehicles will see a lower price while enrolled with OReGO: A $612 fee for four years would drop to $172, and a $306 fee for two years would drop to $86.

The gas tax system, based on the principle that the more people drive on Oregon roads, the more they’ll contribute through frequent fill-ups, falls flat under the wheels of electric vehicles. The new fee structure is a way for ODOT to collect revenue for highway maintenance projects from electric vehicle owners who don’t pay gas taxes.

Just a small fraction of Oregon drivers have signed up or stayed with the OReGO program so far. Godfrey said about 1,600 people have signed up in the four years it has existed, and about 600 are currently participating.

Drivers exit the program for a variety of reasons, she said. Some leave the state, others sell their vehicles to out-of-state buyers. The program requires use of a plug-in device, which compete for space with similar devices used for auto insurance policy discounts, Godfrey said.

It’s challenging to get people to feel good about signing up for a tax, Godfrey said. That’s why the department hopes the registration fee discounts might help sway drivers.

Drivers of all kinds of vehicles can check for themselves whether they would save money by participating in OReGO by plugging in their mpg rating and typical monthly mileage into the calculator on the program’s website.

Fees for commercial vehicles will also increase in the new year.

©2019 the Mail Tribune (Medford, Ore.). Distributed by Tribune Content Agency, LLC.

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