As Oregon grapples with a widening shortfall in transportation funding, lawmakers are poised to make the state the second in the nation to mandate a pay-per-mile road usage charge for electric vehicle (EV) owners. This move, aimed at addressing a projected $300 million budget hole, reflects broader challenges facing states as the shift to EVs erodes traditional gas tax revenues. The proposal, set for debate in a special legislative session beginning Friday, would require EV drivers to pay 2 cents per mile, potentially reshaping how road maintenance is funded amid the green energy transition.

The initiative builds on Oregon’s existing voluntary program, OReGO, which has been testing pay-per-mile fees since 2015. Under the proposed mandatory system, EV owners would enroll in tracking mechanisms—either through GPS devices or odometer readings—to report mileage, with credits offsetting any fuel taxes paid by plug-in hybrids. Proponents argue this ensures all drivers contribute fairly to road upkeep, especially as EVs, which don’t consume gasoline, currently avoid the state’s 40-cent-per-gallon gas tax.

Shifting Revenue Models in a Post-Gas Tax Era

This push comes as gas tax collections decline nationwide, with Oregon forecasting a $300 million deficit over the next two years that threatens essential services like snowplowing and bridge repairs. According to a recent report in Fortune, Hawaii led the way in 2023 by implementing a similar mandatory program, charging EV owners based on miles driven to compensate for lost fuel tax income. Oregon’s plan mirrors this, but with added incentives: reduced registration fees for EVs, dropping from $316 to around $100 annually, though critics note that heavy drivers could end up paying more overall.

Privacy concerns loom large, as mandatory tracking raises questions about data security and government overreach. Posts on X (formerly Twitter) from users like political commentators highlight public unease, with some labeling it a “tracking tax” that could enable surveillance. For instance, sentiments shared widely on the platform decry the proposal as an infringement on personal freedoms, echoing broader debates in states like Utah, where voluntary EV mileage fees have sparked similar backlash.

Economic Impacts and Industry Reactions

For EV manufacturers and adopters, the fee could dampen enthusiasm for electric models, particularly in a state that has aggressively promoted clean energy through rebates and incentives. A detailed analysis by OPB suggests that while the 2-cent rate is modest—equating to about $200 annually for a driver logging 10,000 miles—it might disproportionately affect rural residents who travel farther. Industry insiders worry this could slow Oregon’s EV adoption, which stood at over 50,000 registered vehicles last year, per state data.

Transportation experts point to pilot programs in other states as evidence of viability. The National Conference of State Legislatures, in its fact sheet on Oregon’s efforts, notes that the state has explored alternatives to fuel taxes since 2001, with OReGO enrolling thousands of volunteers and demonstrating accurate mileage reporting without widespread privacy breaches. Yet, scaling to mandatory enforcement introduces complexities, including enforcement for non-compliant drivers and integration with existing toll systems.

Policy Debates and Future Implications

Governor Tina Kotek, who called the special session, frames the measure as essential for sustainable funding, proposing it alongside modest gas tax hikes and increased fees for heavy trucks. Coverage in Newser highlights bipartisan support, with some Republicans backing the EV fee as a fair-user-pays model, though others decry it as punitive to green initiatives. Environmental groups, meanwhile, express mixed views: supportive of EV growth but wary of disincentives.

Looking ahead, if passed, Oregon’s program could set a precedent for other states like California and Washington, where similar funding gaps are emerging. A Columbian article reports that without action, Oregon risks delaying critical infrastructure projects, potentially costing billions in deferred maintenance. For industry stakeholders, from automakers like Tesla to fleet operators, adapting to these fees means rethinking pricing and incentives, possibly accelerating innovations in efficient driving tech.

Balancing Equity and Innovation

Equity remains a flashpoint, with low-income drivers potentially burdened more, as noted in discussions on X where users argue the fee favors urbanites over those in remote areas. To mitigate this, proposals include income-based rebates or caps on annual charges, drawing from Hawaii’s model.

Ultimately, Oregon’s experiment underscores a pivotal tension: fostering EV adoption while ensuring roads are funded. As the special session unfolds, the outcome could influence national transportation policy, signaling whether pay-per-mile becomes the new norm in an electrified future.