Oregon Proposal to Tax Fuel Efficient Cars Gains Speed

To date, there are 1,200 cars registered in Oregon that would meet the 55 miles per gallon criteria.

Image: Northwest Watchdog

(SALEM) - A proposal to tax fuel efficient cars could be getting some mileage in the Oregon legislature.

Though lawmakers are more than halfway through the session and the bill that would put a per-mile fee on cars that get 55 miles to the gallon or more still sits in committee, it’s far from dead. House Bill 2453 is scheduled for a work session Wednesday in the House Revenue Committee. But lawmakers still have many holes to fill, including what the road usage charge per mile would be.

Opponents hope the those lines in the bill stay blank.

“Our problem with this bill is that it is targeted,” said Paul Cosgrove, lobbyist for the Alliance of Automobile Manufacturers. He said because of the high mileage, only electric plug-in and hybrid electric cars would be impacted. That was the problem with a similar bill that failed to pass in 2011. It specifically went after electric vehicles.

The logic of policy makers behind taxing electric and other fuel-efficient cars is that they aren’t paying the state tax on gasoline (which you pay when you pump) and therefore aren’t contributing to road construction and repair.

“It’s a concept that will not go away,” said state Rep. Vicki Berger, R-Salem, the bill’s sponsor. “Whether this bill passes or not we have to pay for our roads.”

As the number of fuel efficient cars grows, that’s fewer people paying the gas tax, she said. “Somehow, someway you have to come to terms with it.”

But the reality is cars getting that kind of mileage – which tend to be pricier and less attractive to rural residents or long commuters – aren’t hitting the road in masses as some might have hoped.

To date, there are 1,200 cars registered in Oregon that would meet the 55 miles per gallon criteria, Cosgrove said. They’re harder to sell.

“There are reasons why we are having difficulty selling those in a state with a lot of rural areas and a lot of long commutes,” he said. “This (vehicle miles traveled tax) is a major disincentive to people who are buying those vehicles.”

Adding to Cosgrove and Oregon auto dealers’ concerns is another looming mandate that could drive the cost of cars up. Oregon is one of a few states in the country that has joined California in its Zero Emissions Vehicle program, which requires auto dealers to sell a certain number of high mileage cars. Cosgrove said if Oregon’s Department of Environmental Quality doesn’t repeal the rule that was enacted by former Gov. Ted Kulognski via line item veto of legislation then dealers will have to sell  thousands more of these cars per year — and that criteria will keep going up.

“That’s part of the nervousness about the whole thing,” he said.

Cosgrove said dealers will have to up the cost of other cars and trucks to make the fuel efficient vehicles more attractive to buyers.

Berger said the revenue committee is charged with filling the holes of the bill and figuring out just what a per-mile charge would look like, including a possible flat fee option.

“I wouldn’t say the bill is workable until those numbers have been derived,” she said.

And if it does get out of committee, the bill would still need a three-fifths majority in both the House and Senate, a constitutional requirement for any tax measure.

Contact Shelby Sebens at Shelby@NorthwestWatchdog.org

http://watchdog.org/81798/oregon-proposal-to-tax-fuel-efficient-cars-gains-speed/