The following "In My Opinion" column ran in the Portland Oregonian newspaper on Monday, May 22, 2000. It is reprinted here with permission of the author, John Charles, Environmental Policy Director of Cascade Policy Institute.

It's time for a new system to pay for road work

To no one's surprise, Ballot Measure 82 was crushed in the May 16 election by a 7-to-1 margin.

It should now be obvious, even to the most optimistic tax supporters, that there is no chance of raising the gas tax in the near future.

Yet it's just as obvious that Oregon's highway system needs to be improved and expanded. How can we reconcile these two realities?

The first step is to acknowledge that the gas tax is an outdated method of road finance, and we should stop wasting time tinkering with it.

The fuel tax is becoming irrelevant because major auto manufacturers are beginning to market hybrid-electric vehicles that get 60-70 miles per gallon (MPG). Within a decade, we may see mid-sized cars getting 300 MPG, capable of traversing the entire country on a single tank of gas. There is no way to make a gas tax system work under these circumstances, because the rate would have to be higher than the politics will ever allow.

Fortunately, other finance models exist.

The most obvious one is to invite private companies to invest in what is now a government monopoly. That is how our telecommunications infrastructure is being built, and the amount of private money pouring in is staggering.

For instance, as reported in the May 15th Oregonian, AT&T is prepared to spend up to $120 billion to build a new system providing both high-speed internet access and cable TV service. That investment dwarfs anything being contemplated for our state highway system, and AT&T does not have to wait around for decades while the legislature debates the issue. All they need is the entrepreneurial spirit, access to capital markets, and the ability to collect user fees from satisfied customers.

We could get the same type of investment in our roadway system if we allowed it. There are dozens of private firms that would eagerly pay for the opportunity to either buy or lease portions of the state highway system, or simply manage it on a contract basis. These same companies would invest additional resources to expand the system where appropriate. This is happening all over the world with regard to highways, trains, airports and subways.

State Road 91 Express in California is one example. Now in its 5th year of operation, SR 91 is a privately-built, privately-operated expressway that is paid for solely through user fees (tolls). The fees are collected electronically from each vehicle as it passes under a gantry, without the need for old-fashioned tollbooths.

The tollway operator also has 12 different toll rates, based on the time of day, giving consumers many choices about how much they want to pay (unlike the gas tax, which is a fixed rate). Those traveling at the peak periods pay the most, and those driving at off-peak times pay the least. This pricing system is so efficient that there is never any traffic congestion. As a result, regular users report high levels of satisfaction.

Metro recently completed a 3-year study of such a tolling system for Portland highways, and concluded that regional traffic speeds would increase by more than 53% at peak periods if we implemented variable-rate pricing.

Electronic tolling of the entire state highway system was endorsed conceptually by the Oregon Transportation Commission as far back as 1992, when the Commission adopted the Oregon Transportation Plan . The plan was supposed to mark a shift towards a true user-fee system, but the legislature never acted on the recommendations.

When Oregon enacted its original gas tax in 1919, it became the first state to do so. Maybe it's time for Oregon to be a leader again, by repealing the gas tax and replacing it with a system based on actual road use.