Key Oregon Democrats are on the brink of finalizing a proposal aimed at raising taxes as a means to enhance the state’s transportation infrastructure and maintain its roads and bridges.
This plan, which is currently circulating in an informational document around the Capitol, suggests a series of tax hikes that include increasing the state’s gas tax from the current 40 cents to 55 cents, along with greater fees for vehicle registration and title.
Additional considerations in the proposal include heightened fees for truckers and a per-mile fee specifically for electric vehicles.
This emerging proposal mirrors the framework presented by Democratic co-chairs of the legislative transportation committee back in April, presenting a continued commitment from the party to address the transportation funding requirements.
Democrats, holding a supermajority in both legislative chambers, have indicated that any transportation package proposed this year would inherently involve these tax increases, aimed at fortifying the maintenance of Oregon’s transportation system.
However, some modifications have been made compared to the April proposal. The tax increments, for instance, have dropped some originally suggested hikes while still advocating for a significant increase in funding.
The latest proposal recommends an increase of the gas tax to 50 cents starting in January, with a further increment to 55 cents set for 2028. Additionally, it proposes raising vehicle title fees by $70 and vehicle registration fees by $50.
The introduction of higher taxes on truckers and commercial delivery companies, along with the imposition of charges for electric vehicle drivers, is also outlined in the proposal. Revenue generated from these hikes is intended for the State Highway Fund, which supports the Oregon Department of Transportation and allocates necessary funds to cities and counties.
In another aspect, the plan seeks to raise the existing 0.1% payroll tax that finances public transit programs across the state to 0.3%. This proposed increase is higher than initially proposed in April but still falls short of what some progressive Democrats believe is essential for adequate funding.
Furthermore, the plan contemplates a 2% tax on new vehicles and a 1% tax on used vehicles. Most of the revenue accumulated from these taxes is earmarked for developing bicycle and pedestrian infrastructure, alongside contributing to debt repayment on major projects.
Despite the Democratic leadership expressing a desire for bipartisan support, the extent of Republican backing for the proposed tax hikes remains uncertain.
“Collaboration has guided every step of our work on this package,” said Rep. Susan McLain, a Democrat from Forest Grove and co-chair of the transportation committee, in a statement addressing the situation.
McLain emphasized the hope that Republican colleagues would remain engaged in the discussions, ensuring that any finalized bill would hold the state agency accountable and prioritize the maintenance of roads and bridges throughout Oregon.
While the two-page document presents an overview of proposed tax hikes, it does not clarify the expected additional revenue to be generated for the State Highway Fund. Previously, the tax increases suggested in April were projected to raise around $1.9 billion every two years for the fund.
Moreover, the proposal offers limited details regarding how to guarantee that the Oregon Department of Transportation will effectively utilize any additional funds generated from the proposed hikes. Both parties have expressed a shared consensus on the necessity of establishing accountability measures within the agency.
To this end, the document suggests implementing “frequent performance audits” and enhancing legislative oversight on megaprojects as part of these accountability measures.
As lawmakers approach the deadline for passing a transportation package within the current legislative session, they have less than four weeks to introduce a bill and conduct several public hearings on the proposal.
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