- Gas taxes that expand and contract to reduce gas price swings
Gas prices oscillate wildly, giving drivers a very mixed signal about how much weight to place on mileage ratings when choosing a car. The moment of purchase is critical, because it’s a decade-long (or longer) commitment to a certain level of greenhouse gas emissions. Gas taxes should not only raise the money needed to provide the public works that cars need; they should also moderate the swings in prices that weaken the “conserve” signal that car buyers and drivers get (or don’t get). But in addition to our gas taxes being laughably low, they’re also clumsy and ineffective because they’re fixed by the Legislature rather than the market. And the Legislature is spineless because voting to raise gas taxes is a sure way to make drivers unhappy. That’s true even when gas prices are plunging and drivers wouldn’t even notice an increased tax, and it’s true when gas prices are climbing, making the costs of public works higher (even while the higher prices reduce demand, limiting gas tax revenue).
The solution is a system that frees the Legislature from the trap of setting gas taxes entirely. That way, instead of turning what should be a routine, technical adjustment into a life-or-death political calculation for politicians, Oregon should let the drivers of Oregon and the law of supply and demand set our gas tax for us, raising the money needed to maintain roads and strengthening the conservation signal for drivers and, most crucially, car buyers.
How? Change the gas tax so that, on top of a per-gallon minimum, the tax can rise and fall when gas prices rise and fall, like a buoy attached to a pole. Only we would add some flex in the gas tax: the tax per gallon would “flex” in the direction opposite to the underlying wholesale price trend. In plain English, the gas tax goes up when gas prices fall, but shrinks when gas prices climb. That way, we reduce volatility in gas prices at the pump while getting more gas tax revenue. But by raising gas taxes when gas prices are falling, we make the increases less objectionable, and help reduce the signal that car buyers and drivers get that encourages them to ignore gas prices.
Experience would soon teach us where to set the per-gallon minimum and the flex factor so that we raise the necessary gas tax revenue while cushioning price swings. This reform, valuable alone, would be even more valuable if coupled with reform to how we allocate our gas tax revenue (see #2 below). But even by itself, it would mean we are no longer paralyzed by geo-political forces and technological changes: we would have a gas tax fund that automatically provides moderating negative feedback to the market forces.
Say the tax is imposed when Oregon wholesale gas prices for the week average $2.00 per gallon. With a 50% flex factor, the next week, if wholesale gas prices drop 10 cents a gallon, the state gas tax would rise by 5 cents a gallon, so drivers and the gas tax fund split the benefit of the price drop fifty/fifty. Same thing in the other direction: whenever average wholesale prices climb by 10 cents a gallon, the gas tax shrinks by 5 cents a gallon (until it hits the legislated minimum, currently 30 cents a gallon).
The Department of Revenue would adjust the gas tax weekly, using the wholesale delivery prices for fuels for the prior week, using a transparent calculation, so there is no more battling over gas taxes. The Legislature would approve the budget for items to be funded from the gas tax, and the Department of Revenue would adjust the minimum per-gallon tax so that, if gas prices were constant from that point on, the minimum per-gallon tax would be expected to generate the same amount of money as the Legislature approved to spend.
By keeping pump prices higher than they would otherwise be when prices are declining, we raise more money when it easier, preserving the conservation incentive for drivers and, critically, car buyers. By reducing gas taxes when wholesale prices climb, we soften the blow of higher gas prices but without putting ourselves into deficit, since the minimum tax per gallon is set to fund the planned spending approved by the Legislature in the budget. Thus, even though bureaucrats are raising and lowering taxes, they are doing it under the control of the Legislature, which decides which projects to fund and when.
- Let gas tax be spent on transit or forbid use of any money for roads except the gas tax.
If the gas tax is going to be dedicated solely to roads in the Constitution, then only the gas tax should be used to fund roads. Or drop the constitutional bar to spending gas taxes on things like mass transit. There is no principled reason to restrict the use of funds from a tax source while allowing that same use (roads) to devour funds from other sources, such as the property tax. Coupled with the flexible gas tax above, these two reforms would shatter the gridlock in Salem over gas tax revenues by turning the gas tax into what many Oregonians already think it is, how we pay for roads.
- Provide a public option for networked ridesharing services.
Another reform is to provide a public option for networked rideshare services (the geeky name for what companies like Uber and Lyft offer). As private businesses, these are all the rage in some markets, but most places aren’t attractive enough to these companies. But there is absolutely no reason to wait for such private services; rideshare services are a classic “public good” where the government should step in and provide what the market won’t. All that is needed is to require transit districts to stop thinking of themselves solely as “Bus Companies” and start being service providers, where the service is mobility for people who either want to drive less, or can’t drive, or can’t afford to drive.
As a state, we create a “public option” networked rideshare service app that each transit district can customize. It lets individuals sign up to offer rides in their own vehicles (subject to safety inspections and driver qualifications); then anyone who wants or needs a ride, including in areas not served by transit at all, can have options for getting around. By helping people get around without needing to own that first or second car, we avoid the additional cars that create their own economic pressure to be driven (once you have purchased and insured the car, it’s very difficult not to drive more, as the per-mile cost drops sharply the more one drives). Which suggests the next necessary idea:
- Outlaw auto insurance policies that reward driving more.
Giving drivers a reward – such as reduced insurance premiums – from driving less is the key to getting people to want to drive less. Oregon should prohibit insurance companies from offering the kind of auto insurance policy that is standard today, where you pay a flat rate based on months of coverage instead of miles driven. Thus, all insurance premiums would have to be sensitive to the amount of driving, creating a system where, within any given driver-risk category, the people who drive the least pay the least for their insurance. And that suggests another useful idea:
- Eliminate uninsured motorists
Estimates are that between 9 and 15% of Oregonians drive without the legally required insurance. They are a scourge and a hazard to everyone else for many reasons. They are not only getting a free ride from everyone else, they won’t see any reward from driving less through the reformed insurance policies discussed above, because they pay nothing for insurance now. All that is needed to fix this problem is to impose a $1 per gallon uninsured motorists premium on every gallon of gas or diesel sold, and allow anyone to escape the tax by showing current proof of insurance. That way, the tens of thousands of people currently paying nothing per mile for insurance will suddenly have the same incentive to reduce miles as the rest of us.
- Bring back the 55 mph Highway Speed Limit.
It saves massive amounts of fuel, and a surprising number of lives.
- Make all motor fuel dealers check and refill tire pressures for vehicles.
We should take advantage of Oregon’s law prohibiting self-serve fuel, and require that the station attendants must offer to check tire pressures on customer vehicles and inflate all tires to at least the minimum recommended pressure. Further, drivers not buying gas should be free to drive into any station and check their own pressure and refill their tires, for free. Underinflated tires are a big cause of reduced mileage, meaning more emissions for the same number of miles travelled.
- 100%-rebated Employer Commute Trip Charge
Every Oregon employer who brings employees to work instead of letting them work from home creates demand for driving, which is a demand for carbon emissions. What we need is a fund that can be used to help employees relocate to be near their employer or to access lower or no-polluting options for their commute. Where to find the money? Collect a nickel per commute mile each way per work day (10 cents, round trip distance) for each mile between each employee’s home of record and their work site. Put all the funds into a grant pool that both public and private employers and employees can use to fund commute trip reduction tools such as transit, technology and training to enable telecommuting, high-mileage vans for vanpools, etc. (And see #10.)
- Bring Back Shop and Riding Classes – bike shop and riding
High schools of old often had Auto Shop class, where students learned to work on cars, back when carburetors were adjustable. What we need now is for all young people to know how to ride safely and how to do the repairs necessary to make it safe to ride, and for all kids to have access to a safe bike. Which suggests another important measure:
- No free parking at any public school or any government office not open to the public.
Oregon’s schools are so fiscally strapped that it is astounding that we subsidize “free” parking for high-schoolers and for teachers – while we also pay for a massive second public transportation fleet of school buses and drivers. Likewise, we massively subsidize parking for government employees, including those whose fixed, regular schedules make them ideal candidates for alternatives to driving.
- Bonus Easy One: Get rid of the front license plate
It’s 4 ounces of dead weight on the front of several million cars. It sounds trivial, but like anything else multiplied by millions, it produces worthwhile fuel and emissions savings, year after year, with no downside. (Our problem is so big that even this tiny, seemingly insignificant step would stop millions of pounds of emissions year in and year out). Even Michigan, home of the American auto industry, has already taken this logical, economical step.