In Ontario, Canada, there's a toll highway, the 407, that works by having cameras at every entrance/exit to the highway. Using these, they log where you enter and exit the highway and send you a bill in the mail based on how far you went on the highway.
So, they could put something on every road that leads in and out of the state that could simply communicate with a device in the car that adds up only the miles that were driven in-state. It would stop counting the miles once you drive through an exit, then start again once you drive back into Oregon.
Then they wouldn't need GPS to track each person's actual whereabouts. And the people who love to circumvent the law would have a device to hack.