OTA Dispatch Issue 4, 2022

8 Oregon Trucking Association, Inc. Oregon Truck Dispatch Oregon Trucking As ociations Worth the Price of Admission? By Gregg Dal Ponte, OTA’s Director of Regulatory Compliance REGULATORY COMPLIANCE YOU ARE UNDOUBTEDLY familiar with this idiom. To be worth the price of admission means something must offer enough value for the price one must pay to participate. This would apply to activities in which someone voluntarily participates. A movie, for example, might or might not be worth the cost of admission depending on whether or not it was a very entertaining movie. A ticket to a college football game could similarly be worth the price of admission if it was a well-played, closely contested game and your team wins. You get the idea. How might this apply to something in which you do not voluntarily choose to participate? For instance, could one ask if the Weight Mile Tax is worth the cost of admission? Here the better question might be, “Is weight mile tax worth the cost of administration?” Oregon tends to distinguish itself. Every state in the nation has a diesel fuel tax for heavy trucks except Oregon. Three other states have a weight mile tax for trucks— New York, New Mexico, and Kentucky— but these are smaller taxes assessed in addition to a diesel fuel tax which is the primary highway use taxing mechanism. Only two states disallow self-service gasoline sales. They are Oregon and New Jersey. Oregon continues to be one of only five states that does not have a sales tax. Oregon is one of only ten states that has a bottle bill. Despite an apparent penchant for being conspicuously different, is there anything about a weight mile tax that inclines Oregon to aggressively defend it in the face of legislative efforts to eliminate it and when litigation seeks to end it? The history of highway use taxation in Oregon is interesting. 1919—Oregon first to use fuel taxes to finance roads 1933—First to implement truck weight/ mileage tax, a Ton-mile tax was based on the changing loaded weight of each truck 1937—Completed first cost responsibility study proportionally allocating the cost of roads to all highway users 1947—Change from ton-mile to weightmile tax charging a single tax rate for all miles traveled based on a truck’s highest operating weight 1990—First to factor axles into weightmile tax rates so tax on trucks over 80,000 lbs. is based on the number of axles Oregon government policy wonks are quick to assert that the advantage of weight mile tax as opposed to diesel fuel tax is that it is extremely accurate in discriminating costs between all classes of users because the weight mile tax rates vary by 2,000-pound weight increments. Such accurate, fair distribution of costs is impossible in a fuel tax system because fuel consumption doesn’t go up proportionately as vehicle weight increases. A 1986 study found that the cost responsibility of an 80,000-pound truck is twice that of a 50,000-pound truck but the 80,000-pound truck only consumes 14 % more fuel. Therefore, fuel taxes are equitable as similar vehicles pay more or less fuel tax based on variations in the amount of miles traveled; however, fuel taxes are inequitable as dissimilar vehicles traveling the same annual miles pay different amounts. Also, the government argues that improving fuel efficiency of trucks can offset diesel fuel tax revenue gains that would otherwise result from increases in annual miles from growing industry. Here the trucking industry would reasonably argue that the glaring disadvantage of a weight mile tax compared to a diesel fuel tax is the much greater administrative costs for both government and industry imposed by the weight mile tax. A reasonable question to be considered is “How much is too great a price for equity?” Circling back to the beginning of this article, the question becomes is weight mile tax worth the cost of admission, and to answer that question, we need to calculate how much more a weight mile tax costs to administer. I believe I can answer that question by providing a construct for what identifiable cost categories could be eliminated by the adoption of a fuels tax for heavy vehicles and elimination of the weight mile tax. It would then be simple to monetize such a construct by inquiring of ODOT for current costs associated with each identified line item. To begin, you must understand that ODOT CCD auditors are responsible for auditing WMT, IRP, and IFTA. So, the question becomes what percentage of auditor time is devoted to each type of audit. In the past it would have been easy to establish the amount of time devoted to each audit function because auditors were specialized and sorted into two groups: WMT auditors and IRP/ IFTA auditors. Today that is not the case, and all auditors are expected to be cross trained to perform any manner of audit. However, my recollection is that the ratio