Road Funds Part 3 - Property Taxes

Today Oregon roads are funded from a variety of sources. According to a 2014 study by The Tax Foundation study, the sources for Oregon funds are:

User Fees	Fuel Tax	License Fees	Property Tax
3.1%	22.4%	29.4%	45.1%

There is a concern that the fuel tax funds are diminishing as fuel economy improves and more plug-in vehicles hit the roads. The idea we'll look at in this part is eliminating the fuel tax completely and moving this burden to the property tax column. Let's run this through our seven criteria from part 1 and see how it scores:

1) Have some correlation to road wear - 0 point
This tax is correlated to the value of the property that you own and has no connection to how much you drive.

2) Not be excessively regressive - 80 points
This will increase the tax on people with non-farm property. The more property you have, the more you would pay. This is not a regressive tax.

3) Provide adequate funds for transportation maintenance needs - 100 points
Property taxes are currently used to pay for many things, including roads. It could be used to cover the fuel tax.

4) Be simple to pay - 100 points
Property taxes are already in place. This would just add to how much is collected. No new system is needed to make payments or collect funds.

5) Allow for collection without invasion of personal privacy - 100 points
No additional personal information would be collected.

6) Allow for out-of-state travel without paying in-state road fees - 0 points
If you own property here, you will pay, regardless of where you travel.

7) Tax drivers from out-of-state when they are using Oregon roads - 0 points
This would not collect money from people that travel here.

Summary 

Adding it up with our scoring system, this solution of increasing property taxes only scores 380 points. This is less than the 520 points that increasing the gas tax scored.

Raise The Gas Tax: Road Funds Part 2

In part 1, we established that our transportation infrastructure is in poor shape and desperately needs funds and we determined what criteria would be used to measure the success of any new funding scheme.

Now we'll look at proposals that have been put forth as well as invent a few of our own. Here is the first proposal:

Raise The Gas Tax

One potential solution is to simply raise the gas tax. Gasoline is still our primary fuel source for cars on the road today and it will be for many years. In the last year, Virginia and Massachusetts raised several taxes to cover transportation costs, and a handful of states raised their gas taxes. This is the solution that Oregon Congressman Earl Blumenauer likes. In April of 2015 Rep. Blumenauer posted:

"The people on the ground understand there is no viable alternative to fund America's infrastructure needs. A gas tax increase is the only solution that is dedicated, sustainable for the long term, and big enough to do the job. ‪#‎FixTheTrustFund‬"

Increasing the gas tax would decrease gasoline use thereby reducing all the political, military, and environmental problems associated using gasoline. Additionally, no new mechanism is needed to collect these funds. This would be able to fund our roads for at least the next 20 years.

However, is it fair that EV drivers don't have to pay for roads at all? You could (and many EV drivers do) argue that EVs more that make up for this by not polluting the air or requiring the military to guard the Strait of Hormuz. But, your local DOT is only worried about fixing potholes and making sure the local bridges don't collapse. The externalities related to gasoline use are very important, but let's put them aside right now and focus only on transportation infrastructure funding.

Scoring 

Here's our criteria from 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

To assess each tax or fee idea, we'll walk through each item on the list and score it from 0 to 100. Some of these might be more important to you than others feel free to compute your own scores and add or subtract criteria.  Let's see how raising the gas tax scores:

1) Correlation to road wear - 30 points
Since heavier vehicles generally use more fuel and cause more road wear, there is some level of correlation. However, a gas tax increase does not cover alt-fuel vehicles. Electric cars, veggie oil, CNG, compressed air, or any other alt-fuel that can be dreamt up would sidestep a gas tax increase. These alt-fuel cars cause just as much wear as similar weight gas cars. The fact that some fuel types get a free ride here greatly reduces this solutions score in this area.

2) Not be excessively regressive - 0 points
A gas tax increase could be significantly regressive. Nearly all of us need to drive, whether it's for work, shopping, or errands. Increasing the gas tax would increase the tax burden more on the working poor.

3) Provide adequate funds for transportation maintenance needs - 100 points
Increasing the gas tax certainly could fund the roads. Any new tax should include automatic periodic inflation adjustment.

4) Be simple to report and pay - 100 points
Paying at the pump is simple; no forms, no bills, they even take credit cards.

5) Not invade personal privacy - 100 points
Paying at the pump does not ask you where you were or what road you were on. You can even pay in cash and it is completely anonymous.

6) Allow for out-of-state travel without paying in-state road fees - 100 points
When you drive to another state and you are buy gas somewhere else, you would not be paying Oregon road taxes.

7) Tax drivers from out-of-state when they are using Oregon roads - 90 points
When people in gas cars drive here from other states and fill up at a gas station in Oregon, they

Summary 

Tallying it up, Increasing The Gas Tax scored 520 out of a possible 700 in our system. Increasing the gas tax is a simple solution with no additional overhead costs. And since gas will dominate our transportation system for at least the next decade, it will meet the funding needs. Additionally, this can be done with no invasion of privacy. There are only two drawbacks to increasing the gas tax. one it is a regressive tax and, two, it does not tax EVs or other alt-fuels.

Road Funds - Is there a perfect solution? Part 1

Construction of bridges and roadways, maintenance of bridges and roadways: paying for our transportation infrastructure is not cheap.

Transportation infrastructure is deteriorating nationwide. States are finding it difficult to maintain their roads and bridges and to fund new construction projects. One of the primary sources of funding for infrastructure is a gas tax. This source, however, is drying up.

A one-two punch has hit the gas tax. One, cars are being driven fewer miles. Oregon, for example hit peak driving in 2004. Each year since then has seen fewer miles on the state's roads. Millennials just don't drive as much as previous generations. They are digital natives and are happy to work at the corner coffee shop rather than an office 20 miles from their home. The second punch is that vehicles are becoming more fuel efficient. Hybrid and plug-in vehicles are steadily increasing the MPG rating of new cars.

Even with the reduction in miles driven, many of the road maintenance costs continue. So how should we fund our roads?

There are always behavioral elements associated with a taxes and fees that must be considered. In a simple model, governments tax the things they want to discourage and have incentives for the things they'd like to see proliferate. For our road funding thought experiment, I propose that any potential solution would be measured with the following criteria:

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

Constructing a solution to meet all of these goals will not simple. What do you think of these are the success criteria? People often disagree about things because they have different goals. If we have agreement on the goals, we're more likely to have agreement on the solution(s).

You might have noticed that there is no item in the above list for air pollution or CO2. These are important, but this is an issue for road funding. If the externalities of fossil fuel use is to be addressed (and I think they should), that would be independent from road funds. So something such as a carbon tax is outside of the scope of the road funding discussion.

In the next few posts let's look at a few proposed solutions and see how they rate against these criteria.

	Potential Funding Method
Part 2	Raising the gas tax
Part 3	Increasing property taxes
Part 4	Increasing vehicle registration
Part 5	Tire tax
Part 6a	GPS OReGO
Part 6b	No GPS OReGO

Tesla CHAdeMO Adaptor Is Here!

Tesla CHAdeMO Adaptor in use At Solar World in Hillsboro Oregon
Photo by Chris A via PDX Tesla 

Tesla has been selling their CHAdeMO adaptor in Japan since mid-2013. In the U.S., they started accepting preorders (by invitation only) in December 2013. The preorders started shipping in January 2014. However, you were still not able to order them from the Model S accessories page. January came and went, February did the same, March arrived and the first day of spring blossomed and still the CHAdeMO adaptor was not available in the Tesla online shop.

"Coming Soon" replaced with "Add To Cart"!

Today, that has changed! The CHAdeMO adaptor is finally available for general purchase. The "coming soon" label (which has been there for over a year) is finally gone.

CHAdeMO Adaptor for the Tesla Model S Received in the Mail
photo by Dennis Pascual

Here in the NW corner of the US, there is a vast CHAdeMO network, as you can see in the image below. A CHAdeMO adaptor would be very handy around here.

Oregon & Washington CHAdeMO Charging Stations, Oct 2014 

If you'd like one, for just $450, it can be yours. Here is the link to Tesla's accessories page: http://shop.teslamotors.com/products/chademo-adapter

Here is an image of the adaptor at work:

Tesla Model S charging up with the CHAdeMO adaptor
Photo by Chris A via PDX Tesla

It is important to note that CHAdeMO stations are not as fast as Tesla Supercharger stations. Superchargers are ~120kW today, where as CHAdeMO stations are 25 to 50kW. So you can expect to "only" to get about 140 miles of range per hour while at a CHAdeMO station. This rate means that a typical lunch break will get you enough to get you to a local destination or the next charging station.

Happy Charging!

200 Mile EVs Are Coming

Recently Elon Musk said that 200 miles of range was the minimum for a "passing grade" for electric vehicles. 

As you can image, many of the people that are driving the ~100 mile range EVs that are on the road today didn't agree with him. You can read story after story about the number of miles they've driven, the treks they've taken. I've written similar stories here about how useful EVs are. They further add that the charging infrastructure is growing and this makes EVs even more useful. 

I started driving an EV in 2007. It only had a 40 mile range. This was my daily driver. As the batteries aged, the range slowly decreased. When I sold it in 2011, it only had a range of 25 miles. Yet, even with this short 25 mile range, nearly all of my daily driving was carried out in this EV. 

After getting by with just 25 miles of range and proving that it can meet most of my driving needs, you might be surprised to hear that I agree with Elon Musk. 200 miles is minimum required. But required for what? For my daily needs? No. 200 miles is what is needed for EVs to cross from a niche to a mass market product.

A 40-mile EV worked for me, because I (like most of you reading this) fell onto the left side of the technology adoption curve. I was willing to make changes to my life to make an EV fit. When I started driving a Nissan Leaf with 73 miles of range in 2011, the number of compromises needed dropped significantly. I didn't have to charge everywhere I went. I didn't need to carry 8 different dryer outlet adapters.

Sub-100 mile range EVs are very useful, but they alone, would never never be able to have mass market appeal.

If EVs are going to jump the chasm, they need fewer compromises. Today, that means they more range at an affordable price.

Power Your Home With Your EV

EVs are batteries on wheels. There are times when it would be nice to use these batteries for more than just moving the car. Nissan has started a program called EVs for Resilience that would allow for just that.

Nissan LEAF to Home system

Nissan's Vehicle-to-Home (V2H) system would allow you to use a Leaf as a power source during times such as a natural disaster or power outage. They estimate that a fully charged Leaf could power a home for 2 days. In the case of a simple downed power line, it would be possible to drive a short distance, charge up the car and bring back a nearly full charge to continue running your home.

Taking this a step further, at the Geneva Motor Show 2015, Nissan has formalized a partnership with the Spanish energy company Endesa. They will work together on Vehicle-to-Grid (V2G), using an energy management system that will draw energy from Nissan EVs when the grid energy demand peaks.

Below is a video promoting Nissan's EVs for Resilience strategy. 

A Gas Can For Your EV

One of the things that people often worry about before they buy their first EV is "What do I do if I run out of charge in the middle of nowhere?" After a couple of months driving an EV, this is generally alleviated.

Way back when gas stations were few and far between, this same concern existed for gas cars and in many cases it was solved with the gas can, known as the jerry can. A Dutch startup called Star Engines wants to bring a similar solution to the burgeoning plug-in vehicle market. They call their idea the Jerr.e.

The Jerr.e is a portable gasoline generator in the familiar shape of a jerry can. It has a patented, small, efficient, light weight, 3D rotary engine. It holds 1.3 gallons of gas and can deliver 30 to 40 additional miles of range.

We have written about range extender trailers before here and here. The trailers have the advantage that they can charge the car as you drive down the road. However, this would require modifications to your car. The Jerr.e has the advantage of being small, portable, and utilizing the charging port that is already on your car.

Star Engines plans to start shipping these in 2016 and they would like to have partnerships with dealers and auto manufacturers so the Jerr.e could be ordered as an accessory when you purchase your next car.

If you are looking for some peace of mind that you can store in your trunk, or have that one annual drive that is iffy for the EV, this is something to consider.

Company's website: http://www.star-engines.com/

Electric Car Prices Will Drop

Batteries are the biggest cost in an Electric Vehicle (EV) today. However, EVs are far from the only things that use batteries. Ever since the first mobile phones, our demand for smaller, longer lasting batteries has been growing.

Evolution of mobile phones

As we move into wearable technology, e.g. smartwatches, this trend will continue and EVs will benefit greatly in both cost and range.

How much will prices drop? Future estimations are difficult, but there are some techniques that can be used.

First, are there any immediate technological barriers? Looking at recent research shows that minor improvements are being made in labs around the world. Many of these make great claims that they will result in 4 or 5 times the battery performance. These claims are likely exaggerated greatly, but the volume of them alone likely means that the trend in production price reductions will continue into the near future.

Second, are there any long term barriers? Several technologies are vying to be the next big thing: lithium-sulphur, lithium-air, solid state batteries, graphene, ultracapacitors... One or more of these (or something new) will likely continue the trend beyond the ten year horizon.

Finally, now that we have some assurance that the trend will likely continue, we can ask, "What are the historic trends?".

Below are two graphs that show historic battery prices, as well as future predictions.

If these predictions are accurate, by 2025 plug-in cars become a no-brainer. They will be affordable, cheaper to fuel, lower emissions, and have better performance. The bulk of new car sales will be cars with cords.

Don’t Let Oregon’s Electric Vehicle Leadership Drive Away

Plug In America said that they would run an Action Alert campaign for their members for the Oregon EV Rebate initiative.  This would be similar to the one they recently did for Georgia. They asked me to write the first draft for the campaign. It is below. It is a little too long for their format, but this way they can pick out the points they want to stress and cut the rest.

In truth, I must admit that I cobbled this together from the Union of Concerned Scientists and Drive Oregon's efforts to support the same initiative as well as some of my previous writings about the benefits of EVs in Oregon.

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Electric vehicles (EVs) benefit people, the economy, and our air.

Electric vehicles are good for our state and can save drivers money, but upfront costs are a barrier for many. Oregon has the opportunity to expand the number of EVs statewide with a consumer rebate. This program will make EVs more affordable and cut the state's oil use, while providing substantial cost savings for drivers.

The benefits of EVs for Oregon are vast. They reduce oil use, have no tailpipe emissions, and save consumers money at the pump. But without a policy to reduce upfront costs, the EV market isn't growing quickly enough.

The Oregon Clean Car Rebate would cut the sticker price of EVs, putting them within reach of more Oregonians. As more people buy or lease EVs, the price will come down and the market will grow even faster. That will help consumers as well as our state’s economy and climate.

A February 2015 study found that the approximately 5,000 electric vehicles already on Oregon’s roads today contribute up to $10.15 million annually to the Oregon economy and up to $676,700 in state and local tax revenue.

EVs boost the state’s local economy in several ways. Oregonians spend more than $6 billion each year on gasoline and diesel. Oregon has zero oil wells and zero oil refineries. This means that the bulk of every dollar spent here on gasoline leaves the state. Electricity, on the other hand, is generated locally, so the “fueling money” spent for EVs stays local. One study found that every dollar shifted out of gasoline spending produces 16 times more economic activity in its local region.

How would you like to pay just $1 per gallon? That’s not a fantasy: that’s the equivalent cost of driving an electric car in Oregon today. This means more money is left in your household budget for all the other demands and a little more fun.

Because EVs have not been on the market very long, there is not a significant pool of used cars available yet. Additionally, because of the new technology, EVs still have a slightly higher sticker price. While there is a $7,500 federal tax credit available, some 80 percent of Oregon taxpayers don’t make enough money or have enough tax liability to take full advantage of that credit.

That’s why the Energize Oregon Coalition, which includes more than 100 businesses, conservation and public health groups, and other stakeholders are supporting legislation to create a $3,000 Oregon rebate for electric cars. Studies suggest that even this modest rebate — about 10 percent of the purchase price of the most popular electric cars — can increase their market share by 50 percent to 80 percent, with twice the impact of an equivalent tax credit. In fact, Atlanta has become a leading EV market in large part due to Georgia’s state incentive.

Thanks to the efforts of the Oregon Department of Transportation, Travel Oregon, and others, Oregon currently has one of the best EV charging infrastructure networks in the nation. This brings Mt Hood, the Pacific coast, the Columbia River Gorge, Forest Park, covered bridge tours in Cottage Grove, cherry blossom tours, scenic river byways, the Oregon Dunes, beer and wine tours, and much more are all within the range of an EV in NW Oregon.

Thanks to the abundant hydro and wind power in Oregon, most of the electricity these cars use will be renewably generated. The electric utilities here are happy to see EVs on the road. EVs generally charge up overnight. This helps increased demand at off-peak times and helps stabilize the grid.

The rebate is projected to cost less than $4 million a year — the equivalent of less than a penny a gallon on the price of gas. Getting more Oregonians behind the wheel of an electric car will produce dividends for Oregon families, for our economy, and for the environment for years to come. It’s an investment with great returns.

Related Post:
9 Reasons EVs Are Great In Oregon

Plug in Folly - An In Depth History of the Electric Car - YouTube

Plug in Folly - An In Depth History of the Electric Car - YouTube:

To: The Arthur Morgan Institute for Community Solutions

Re: Your video "Plug in Folly - An In Depth History of the Electric Car"

Why do you ignore renewable energy? Wind and solar are being installed at record rates. Plug-in cars continue to improve every year as the grid greens. Gas, on the other hand, gets worse each year as light sweet crude is depleted and shale and other heavy sources are used that need more energy to refine. Even you admit that plug-in cars are already marginally better. How much bigger will that margin be in 2025?

Why do you ignore national security? Electricity (even coal) is locally sourced in our own country. We don't have to guard the Strait of Hormuz or send troop into harms way to power cars with electricity.

Why do you ignore the cost per mile to drive? Electricity is equivalent to about $1 per gallon gasoline. This means a lot of savings for the average household. This money allows people to have a savings and some of that is spent locally, thereby improving the local economy.