Oregon's mileage fee report maps way to reform - AN ESSAY

Oregon DOT's Mileage Fee report is the most useful report on surface transportation in many years. By contrast, two "national commissions" on US surface transportation policy that reported recently were useless - proposing more of the same mishmash of corrupt favor trading and brain-dead 'planning' that has got our transportation into the mess it is today. Oregon's Mileage Fee (OMF) is a practical template for how we could move away from motor fuel taxes to direct road use charges (RUCs) - direct prices for road use or tolls that are applicable anywhere on roads.

Fuel taxes are a crude and roundabout way of charging for road use. They prop up a corrupt and wasteful system that disconnects road users from road providers, producing mediocre road service at high cost. Its inability to vary the price by time of day costs us a couple of hundred billion dollars a year in traffic congestion.

It is politically and financially unsustainable and inequitable.

Only by pricing roads directly, by literally charging what the traffic will bear, is it possible to develop a market mechanism for generating the revenues and allocating investment to the most urgent road needs. Road service providers should have to live off road use charges, just as most toll authorities and concessionaires do.

That direct financial dependence on road users will cut out most of the political and bureaucratic middlemen who distort and leech off the tax-&-grant system. It will make the road providers responsive to motorist needs in a way that is impossible with the dispersed responsibility and the pass-downs of tax revenues through lobbyist and bureaucrat controlled federal, state and local governments.

Higher fuel prices are going to cause an increasing amount of road travel to be on more fuel efficient vehicles so the yield of the fuel taxes will diminish, perhaps quite rapidly as people go to more fuel-efficient vehicles and consolidate trips. A collapse in public trust in tax-funded highways means that people won't - sensibly - support higher fuel taxes. We badly need a substitute financing medium and a way of adjusting the price of road use flexibly to match the cost and scarcity of roadspace.

We can now do this with tolls on expressway type roads, with their limited entry and exit points and large volumes of traffic.

But expressways only carry about 30% of the traffic.

The further we go down the hierarchy of roads, through surface arterials and collector roads to 2 lane roads and the like, the less suited are regular toll technologies such as RF transponder/reader systems and license plate reading cameras.

Handling diversion

Diversion is the bane of traditional tolling on expressways. Tolls on the expressways inevitably divert some traffic onto 'free' roads of lesser quality, lesser capacity and less safety. Because of this diversion issue, tolling is always going to be under legitimate criticism so long as it is confined to expressway-type roads.

The Oregon Mileage Fee report is about the design and testing of a system to allow us to move to direct charging for road use over wide areas of surface roads - the ones that we can't practically get to with gantry-mounted electronic toll systems.

The most ingenious feature of the OMF concept is that it allows a transition to road use fees (RUFs) on the back of the established system of collecting motor fuel taxes at the pump.

An on-board unit (OBU) in the car uses some kind of location finding device, likely GPS, to accumulate the vehicle's travel data. When the vehicle gets to a gasoline station a vehicle with an OBU communicates by transponder with a reader at the fuel pump uploading the road use data since the last fueling. The normal gasoline tax is deducted from the price for the fueling. The road use charge is substituted in its place.

A 'true-up' transaction occurs between the fuel distributors who pay the fuel taxes and the revenue raisers to cover the difference between taxes paid on the fuel at the wholesale level and the road use charge revenues.

The beauty of this is that no separate RUC collection system is needed as in Germany's Toll Collect system for truck RUCs.

* It is easier for motorists to use

* It is much cheaper to install and operate

* It reduces the opportunities for evasion of the charge

* Vehicles without a functioning RUC device go on paying a normal fuel tax

Doing collection of the RUC at the fuel pump allows the fuel tax to be an automatic default, handling:

- the transition when vehicles with and without RUC units coexist

- malfunctioning or tampered-with RUC units

- out-of-state vehicles without RUC units

Pilot program successful

Oregon DOT has now reported on an exhaustive demonstration or pilot program in which two gas stations and motorists with 300 vehicles tried out the OMF for a year. All aspects of the concept were tested from equipping vehicles with OBUs, wiring gas stations and programing their sale systems, to trueing up for the difference between the RUC and the fuel tax. The participating motorists got to benefit by using the RUC to minimize their costs.

The pilot program threw up a lot of problems that needed fixes, but they were the typical problems of a first-up and small scale effort. Nothing remotely like a killer problem emerged.

The Oregon legislature has been looking to the OMF mainly to replace the motor fuel tax with a more sustainable source of revenue - so the emphasis has been on using it as a simple fee per mile. If that was all you wanted to do you'd have a kind of super-odometer that reported miles traveled on a regular basis.

Except if it's a charge for travel on Oregon roads you want to distinguish between Oregon miles traveled and out-of-state miles traveled. You could equip the borders of the state with readers that would transmit on/off signals to the super-odometer at the border. In Switzerland they do something like that to charge trucks for use of Swiss roads by distance.

Or you can use the gantry-in-space of location finding satellites to define state borders borders. Ideally you want to be able to locate travel for charging purposes down to much smaller areas of responsibility by local road service providers, eventually to individual roads and even lanes within the broader roadway to cater to premium service lanes versus economy travel.

In the pilot program they had a zone for the Portland metro area, a rest-of-state zone and out-of-state.

They also implemented a flat peak-hours charge for travel within the Portland metro area zone.

The OBU equipment used in the Oregon pilot was a derivative of that developed by Siemens for truck tolling in Germany with heavy reliance on GPS. GPS works alright on German autobahns which generally skirt the cities. It works far less well within cities or wherever there are high buildings and overstructures.

Units in the urban environment will need to have access to other techniques for location finding than GPS such as the use of mobile telephone triangulation and inertial and directional measurements.

A Canadian company Skymeter has been demonstrating a prototype that uses a mix of methodologies in a custom-designed light vehicle unit with the claim to much greater accuracy and much lower price than the Toll Collect derived units.

New York City's congestion charging scheme ended up a cordon toll system after initially attempting to levy a charge for movement within the charging zone. The internal charge was extremely expensive to implement with normal gantry-borne electronic toll gear. Three quarters of the capital cost went on collecting a charge that would generate less than a quarter of the revenue.

And its dependence on fixed gantries made it very inflexible. A much better technology for road use charges within a zone would probably make use of on-board location finding units and travel data storage along the lines of the Oregon proposal.

see the ODOT report by James Whitty

http://www.oregon.gov/ODOT/HWY/RUFPP/ruftf.shtml

TOLLROADSnews 2008-04-28