Who Pays More?

Nothing gets a conversation started like a proposal for a new tax or a user fee. OSU economist B. Starr McMullen discovered that when she gave public presentations about vehicle mileage fees. “This is the one topic I’ve done in my career where everyone has an opinion,” says McMullen, an expert in transportation economics.

In a study funded by the Oregon Transportation Research and Education Consortium (OTREC) and the Oregon Department of Transportation (ODOT) in 2006, she led the development of three models to examine the effects of mileage fees on how much people drive, how the fees would be distributed among rural and urban motorists and how the tax change would affect different income groups.

Using data from a 2001 national transportation survey, McMullen found that shifting from the gas tax to a mileage fee made little difference in how much motorists would actually pay and thus had little or no effect on how much they drive. She also showed that mileage fees would be slightly more regressive than the gasoline tax. That is, motorists with the lowest incomes would pay a small increase, less than 1 percent of their income, under a mileage fee program. However, that pales in comparison to the more than 5 percent increase that occurred when gasoline prices roughly doubled from 2001 to 2006.

Comparing urban and rural residents, McMullen found that rural drivers would pay slightly less under mileage fees. Even though rural motorists tend to drive more miles, they also tend to have more pickups and other vehicles that get lower fuel mileage. Owners of fuel-efficient vehicles would pay slightly more under a mileage fee system.

A lack of car sales data prevented McMullen and her team from evaluating the impact of mileage fees on vehicle purchasing preferences.

OTREC honored McMullen with its first Researcher of the Year Award in 2009 for her leadership in the analysis. In March 2010, she was elected president of the Transportation Research Forum, an international independent organization of researchers and other professionals.

Her report, Techniques for Assessing the Socio-Economic Effects of Vehicle Mileage Fees, was published in 2008 and is available online.