Desperate for new revenue, Colorado officials may actually let you stop paying state taxes at the pump. Here’s what they want from you instead.

Could This Be the End of State Gasoline Taxes?

Someday soon, Colorado drivers may be able to say so long to the 22-cent-per-gallon state tax on gasoline and pay a metered road usage fee instead.

If so, you’ll pay as you go, not as you pump.

The Colorado Department of Transportation recently announced a road usage charge (RUC) pilot program to give the idea a shot. About 100 drivers from the state will be testing mileage-reporting technologies and a manual-reporting option.

High Altitudes, Low Temperatures

The study will look at how the technologies work in Colorado’s altitudes and often frosty environment and will compare the experiences of urban and rural drivers. The study should end in spring of 2017, with the findings released shortly thereafter.

Drivers across the United States currently pay 18.4 cents per gallon in federal gas taxes. Drivers on Colorado roads pay an additional 22 cents per gallon. The proposed road usage charge is 1.2 cents per mile. CDOT researchers determined the mileage rate by taking the figure of $463,715,095—the state’s gas tax revenue in 2014—and dividing it by the estimated 37,369,904,116 miles driven in the state each year.

Western-State Pioneers: Oregon, Washington, and a Dozen More

The program may represent new territory for Colorado, but exploring it puts the state in good company. After two pilot programs in 2007 and 2013, Oregon — which first studied the possibility in 2001 — kicked off a fully operational RUC program, OReGO, on July 1, 2015. To participate, drivers apply online and plug a small device into the data ports of their cars. They receive a monthly statement to settle their accounts.

In its similar program, Washington state added instant auto accident reporting and family monitoring to its GPS-enabled trackers.

In fact, Colorado is one of 14 western states interested in road usage fees, according to Western Road Usage Charge Consortium. The organization says that member states and others have researched both high-tech and low-tech mileage recording and payment options.

One possibility is time permits, which allow unlimited road usage for a specific time period. Mileage permits, though, would allow for prepaid travel. States could also charge after the traveling by relying on periodic odometer readings. Data-linked vehicles could report mileage automatically to a public or private account manager.

Flat Tax Revenue + Growing Infrastructure Needs = Openness to Innovative Alternatives

Although gas prices have risen steeply since Colorado lawmakers enacted the current rate in 1991, the tax revenue from that source has been more or less flat during those years.

Yet fuel charges are a key source of funding for building and maintaining roads and bridges. And CDOT says it is facing a nearly $1 billion annual funding gap over the next 25 years. The problem has gotten worse both because of lower gas prices in very recent years and because cars are becoming more fuel-efficient. So the agency is actively exploring alternative means of funding infrastructure.

CDOT Executive Director Shaeilen Bhatt says:

Colorado’s population is expected to nearly double by 2040 to 7.8 million residents, bringing more demands for mobility, and on our transportation infrastructure. A healthy transportation system is the backbone of our state’s economy and way of life. As the state’s transportation funding gap under the current gas tax grows, we need to explore possible funding opportunities—such as road usage charging (RUC) to ensure Coloradans the mobility they need to live, work and play.

Embed this infographic:
Embed this image: