The Oregon Legislature is making progress on a transportation-funding package. The weight-mile tax on commercial vehicles is among the issues being addressed.
Gov. Tina Kotek called lawmakers back to the Capitol late last week for a special session to address the state’s “most immediate transportation needs.” The regular session ended in June without a transportation-funding agreement.
The Democratic governor called on lawmakers to take up legislation to pay for “basic road maintenance and operations.” Funding would benefit the Oregon Department of Transportation, local governments and transit districts.
Earlier in the week, a three-hour public hearing was held at the Capitol. The hearing allowed citizens and businesses around the state to weigh in on the tax and fee increases.
Much of the testimony received during the Joint Interim Committee on Transportation Funding hearing was in opposition to the governor’s plan.
Governor’s transportation-funding bill
On the first day of the special session, House lawmakers discussed the specifics of a bill the Legislative Revenue Office estimates would raise $791 million during the current budget cycle.
The state gas tax would increase by 6 cents from 40 cents to 46 cents. The change would take effect Jan. 1, 2026.
Vehicle registration fees for passenger vehicles would increase by $43 to $85. Title fees for passenger vehicles would increase by $139 to $216. Supplemental fees for electric vehicles would also increase by $30.
Half of the revenue from tax and fee increases would go to the state transportation department. Counties would receive 30%. Cities would get the other 20%
Another component of the transportation-funding plan calls for doubling the state’s payroll tax to 0.2%. Revenue from the increase would be routed to local transit districts.
Drivers of electric vehicles and hybrids would also be required to enroll in the state’s OReGO program. The program charges drivers for miles driven.
“This is just the first step of many that must be taken to meet our state’s long-term transportation needs,” Kotek explained.
Weight-mile tax
To address what Kotek referred to as “ratepayer fairness,” the bill would revise weight-mile tax tables.
The Oregon Constitution requires the state highway fund to be “fair and equitable to light and heavy users alike to ensure that cars and trucks pay their fair share of the usage of the road.”
The governor’s transportation-funding plan is touted to simplify the number of tables based on declared combined truck weight. It also sets rates for those categories.
Weight-mile rates would be reduced from 87 separate tax rates to 10. Diesel fuel would also be treated as a motor fuel rather than a use fuel.
The governor’s administration touted the change as a way to “simplify weight-mile rates to reduce weight-mile tax evasion and alleviate administrative burdens on trucking companies.”
By 2029, a diesel tax would be implemented with weight-mile rates adjusted accordingly.
Oregon Trucking Association supports truck-related changes
During the public hearing on transportation funding, Oregon Trucking Association President Jana Jarvis testified that truck operations welcome the changes.
She said it is time for Oregon to move away from its heavy reliance on the weight-mile tax.
“Today, 49 states collect taxes from the trucking industry via fuel taxes. Four of these states have also implemented a simplified weight-mile tax as a supplement to their budgets,” Jarvis testified.
She added that Oregon’s participation with the International Fuel Tax Agreement is “minimal” and that as a result, it is harder to audit carriers to ensure their weight-mile tax statements match the mileage they file with IFTA.
“It is past time for Oregon to fully join IFTA by instituting diesel fuel taxes for heavy vehicles,” she said. “It is also time for Oregon to simplify the weight-mile tax system.”
Vote delayed
Passage of any tax increase at the Oregon statehouse requires a two-thirds majority.
House lawmakers approved the transportation-funding bill Sept. 1, mostly along party lines.
A Senate vote was delayed until Sept. 17. Senate Majority Leader Kayse Jama, D-East Portland, cited one Democratic lawmaker’s unavailability until that time to cast a vote in favor of the bill.
The state Constitution requires that legislators be in attendance in the chamber to vote.
Republican lawmakers remain largely opposed to the tax and fee increases.
House Minority Leader Christine Drazan, R-Canby, said in a statement the governor is “doubling down on higher costs at the pump and in registration/title fees when Oregonians can least afford it.”
Instead, GOP leaders maintain the state would be better suited to prioritize ODOT core functions. “Non-essential programs and divisive agendas” would be sidelined, while federal transportation funding would be protected and critical road safety services would be preserved.
The caucus has identified $730 million in refocused spending, cost savings and spending cuts. LL
This Labor Day, House Democrats chose to harm Oregon workers and families by passing the largest transportation tax hike in Oregon history.
This fight isn’t over. Oregonians deserve better. Stay tuned. pic.twitter.com/QKhmFZygmu
— Christine Drazan (@ChristineDrazan) September 1, 2025
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