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Wednesday, July 8, 2015

Road Funds Part 4 - Vehicle Registration

Welcome to part four of our road funding exploration. Oregon has recently launched OReGO, a vehicle mileage tax. While it is easy to criticize any government policy (especially a tax), the hard part is coming up with a viable way to fund our mutual goals, so we'll look at several suggested funding methods (as well as a few of our own) and score them to see how they stack up.

In this post, we'll look at the idea raising the vehicle registration fees.


Oregon's first vehicle registration law was enacted in 1905. It was a one-time only fee of $3 and was dedicated to road construction. Today, a regular vehicle title is $77 per year (you have to pay for 2 years at a time) and, if your car requires smog checking, is usually rolled in with a DEQ fee. Vehicles with a gross vehicle weight rating (GVWR) over 26,000 pounds pay $90 per year.

Today, most people drive about 12,000 miles per year. Assuming an average fuel efficiency of 23 MPG, that means the average annual gas tax payment is ~$156. If the gas tax were to be completely replaced with a registration fee, we'd have to pay an additional $312 registration fee every two years. That would bring the total up to $466.

To assess each tax or fee idea, we'll walk through each item on the list and score it from 0 to 100. Let's see how an increased registration fee scores against the criteria we defined in part 1:

Road fund taxes/fees should:
1) Have some correlation to road wear
2) Not be excessively regressive
3) Provide adequate funds for transportation maintenance needs
4) Be simple to pay
5) Allow for collection without invasion of personal privacy
6) Allow for out-of-state travel without paying in-state road fees
7) Tax drivers from out-of-state when they are using Oregon roads


1) Correlation to road wear - 0 points
Registration has nothing to do with miles driven

2) Regressive Tax - 30 points
This fee have no coorelation to income or vehicle cost. It is generally regressive. The only reason it earns any points here is that lower income households don't tend to have Jay Leno garages with a card catalog of vehicles to select from.

3) Provide adequate funds - 100 points
The registration value could be selected to meet the road fund needs. In down economic years, the number of miles travels varies more than the number of registered vehicles.

4) Simple to pay - 100 points
Registration fees are already paid today. No new infrastructure is needed to collect these funds.

5) Privacy - 100 points
The state would not need to collect in additional information about you for this fee.

6) Out-of-state travel - 50 points
This fee is not associated to miles traveled, so it does not matter where you drive.

7) Tax out-of-state drivers - 0 points
Out of state drivers would not register their cars here and if there is no gas tax, then no fees would be collected from out-of-state drivers.

Adding it up, raising the registration fee scores 380 points. For reference, raising the gas tax scored 520 points and increasing property taxes scored the same 380 points. We still have several more funding methods to consider.