Vehicle Registration Fee Underlying $5.3 Billion Transportation Package Penalizes Thrifty Drivers

As the City of Portland considers $450 million I-5 Rose Quarter project, economist examines equity complaints.

As Oregon moves toward tolling Interstates 5 and 205 to reduce congestion and help pay for highway improvements laid out in the $5.3 billion transportation package Gov. Kate Brown signed into law this summer, some critics, including Washington elected officials, say tolling is unfair because it hits drivers equally and thus disproportionately punishes both Washingtonians and low-income drivers.

Related: Nine Washington lawmakers join U.S. Rep. Jaime Herrera Buetler in opposing tolls on Oregon highways.

Portland City Council is already grappling with the largest single project in the new transportation package, the proposed $450 million widening of I-5 at the Rose Quarter. Critics, including Portland economist Joe Cortright, say the project will do little to reduce congestion.

Writing at City Observatory, the Cortright addresses a different aspect of the package: how it's funded. He says that implicit in the complaints about tolling from Washington politicians and some Oregonians is a defense of the current system of funding transportation, which relies heavily on vehicle registration fees.

The $5.3 billion package, which Brown signed into law Aug. 18, includes an across-the-board increase in vehicle registration fees, in addition to the proposed tolling.

Related: People priced to the edge of Portland now face the expensive prospect of highway tolls.

"One of the assumptions of those who question the "fairness" of road pricing is the notion that somehow our current system of paying for roads is a fair one," Cortright writes. "But what's equitable about our current system of paying for roads? Not much, as it turns out."

The problem, Cortright notes, is that vehicle registration fees are also regressive—they hit the poor the hardest—and do not distinguish between cheap, high-mileage vehicles that rarely leave the garage and expensive gas guzzlers that get driven a lot.

Cortright compared the registration cost an older Subaru from Multnomah County, where owners pay a higher registration fee to cover part of the cost of the new Sellwood Bridge, and a new Chevy Suburban in Clackamas County.

Residents of that county use the Sellwood Bridge heavily but refused to help pay for it, so their registration fees are lower than the fees charged to Multnomah County residents.

Here's what the numbers look like:

The chart shows that a Multnomah County resident would pay far more in terms of percentage of a vehicle's value and also pays more per mile.

"If we're really interested in making the road pricing system fairer–especially to those low and moderate income households with older, less valuable cars, who drive shorter distances," Cortright concludes. "We ought to move away from flat per vehicle fees, to charges that are related to how much people drive, and how much wear and tear their cars cause to the roadway."

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