Oregon considers subbing mileage tax for gas tax

That drop, caused by lower fuel consumption and a slowing economy, has prompted Oregon to consider a new way to pay for road repairs: Democratic Gov. Theodore R. Kulongoski's upcoming budget calls for a highway tax based on mileage, not gasoline purchases.

A state task force will look at equipping every new vehicle in Oregon with a Global Positioning System to record every mile driven and where. Motorists would pay at the gas pump based on how much they drove, no matter how fuel-frugal their vehicle.

The plan still requires legislative endorsement and the full details could take several years to work out, but state analysts said the governor's endorsement is a crucial step toward solving what has become a problem in many states: dependence on a gasoline tax.

"This is a way to try to develop a fair funding mechanism that we're going to have to have if we're going to be aggressive in terms of looking at electric cars and hybrids and plug-ins and all those options, and at the same time continue to invest in our roads and infrastructure," said Rem Nivens, the governor's deputy communications director.

Oregon plans to spend $650 million on transportation projects next year, a smaller version of President-elect Barack Obama's proposal to stimulate the economy with infrastructure spending. Here, it will be financed in part by a 2-cent-a-gallon tax increase.

Jim Whitty, manager of the state transportation department's office of innovative partnerships and alternative funding, said the state already faces a $10-billion shortfall in financing transportation projects, and the number will climb unless the decline in gas tax revenue is addressed.

Only a major rethinking of highway finance can keep Oregon from running seriously short of transportation funding as early as next year, state officials say.

While Oregon appears to be out in front in looking at a mileage fee, several other states, including Ohio, Pennsylvania, Colorado, Florida, Rhode Island, Minnesota and Texas, have also expressed an interest in phasing out the gas tax in favor of charging motorists for how much they drive.