Oregon truckers and motorists are about to feel a shake-up at the pump – and in their wallets.
Gov. Tina Kotek has officially signed off on a $4.3 billion transportation funding package that’s set to reshape how the state pays for roads, bridges and infrastructure over the next decade. The move, finalized Friday, Nov. 7 and announced Monday, follows months of debate and a special legislative session that wrapped up Sept. 29.
“I’m grateful to the legislature for stepping up to keep Oregon moving – with the help of cities, counties, workers, truckers, businesses, and even AAA,” Kotek said after signing the 10-year plan into law.
Combative issue
Transportation funding was a contentious issue at the statehouse this year.
Democratic majority lawmakers and the governor wanted a funding deal that included tax and fee changes. Republican legislators instead advocated for prioritizing transportation funds already available.
Legislators were unable to reach an agreement on a funding plan before the regular session concluded in June.
Kotek called lawmakers back to work at the end of August to reach a deal.
House lawmakers approved a plan on Labor Day. A Senate vote was postponed until Sept. 29. The delay was caused by one Democratic lawmaker who couldn’t attend to cast the mandated in-person vote. The state constitution requires legislators to be present in the chamber to vote.
The one vote was needed to meet the supermajority threshold for passage of any tax increase. The bill was approved along party lines.
Taxes and fees set to increase
The transportation funding bill is touted to pay for “basic road maintenance and operations.” Funding will support the Oregon Department of Transportation, local governments and transit districts.
The most notable provision in HB3991 is a 6-cent increase in the state gas tax rate. The rate is set to rise from 40 cents to 46 cents on Dec. 31.
The increase is projected to raise about $90 million annually.
Registration fees for passenger vehicles will nearly double from $43 to $85. Title fees for these vehicles will rise by $139 to $216. Supplemental fees for electric vehicles will increase by $30.
The fee increases will also take effect on Dec. 31.
Half of the revenue from tax and fee increases will go to the state transportation department. Counties will receive 30%. Cities will get the other 20%
Another part of the transportation funding plan doubles the state’s payroll tax to 0.2%. Revenue from this increase will go to local transit districts.
Drivers of electric and hybrid vehicles will also be required to enroll in the state’s OReGO program. The program charges drivers based on the miles they drive.
Weight-mile-tax
To address what the governor referred to as “ratepayer fairness,” the bill includes a provision to 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 transportation bill reduces the number of tables based on the declared combined truck weight. It also sets rates for those categories.
Weight-mile rates will be trimmed from 85 separate tax rates to 10. Diesel fuel will also be treated as a motor fuel rather than a use fuel.
Kotek’s administration touted the change to “simplify weight-mile rates to reduce weight-mile tax evasion and alleviate administrative burdens on trucking companies.”
By 2029, a diesel tax will be implemented with weight-mile rates adjusted accordingly.
“Ensuring that passenger vehicles pay their fair share for the roads will eliminate an imbalance that has led to trucks shouldering a disproportionate burden for the last several years,” Kotek said.
Oregon Trucking Association President Jana Jarvis called for Oregon to move away from its heavy reliance on the weight-mile tax.
“This package is the most significant policy bill for the trucking industry in the past 30 years,” Jarvis stated. “It allows us to address our longstanding overpayment issue and modernizes our taxing methodology to be more in line with the rest of the country.”
Referendum Filed! pic.twitter.com/K7RPqsv091
— Rep. Real Diehl (@Real_EdDiehl) November 11, 2025
Republicans pursue transportation ballot challenge
Republican lawmakers opposed the tax and fee increases. GOP leaders said the state would be better off prioritizing ODOT core functions.
Their plan called for sidelining “non-essential programs and divisive agendas” and rerouting money to roads.
The caucus identified $730 million in refocused spending, cost savings and spending cuts.
Hoping most Oregonians share their view, Republicans launched a referendum effort to let voters decide whether to approve the transportation package. The effort focuses on the gas tax increase, registration fee increases, title fee increase and the payroll transit tax.
The process of gathering signatures to refer HB3991 to the November 2026 ballot was delayed. Signature collection could not begin until the bill became law.
The referendum campaign must collect over 78,000 signatures by the end of the year. If the signature goal is met, the new taxes will be paused until the public votes.
Senate Republican Leader Bruce Starr accused the governor of delaying her bill signing to bleed the clock on the referendum effort.
“Oregonians will not be silenced, and their voices will be heard,” Starr stated. “They will have the opportunity to weigh in, hold their leaders accountable and demand a transportation system that works for the people who pay for it.” LL
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