Work will continue at the Oregon statehouse in pursuit of a transportation-funding deal.
Gov. Tina Kotek announced she is calling lawmakers into a special session later this month to address the state’s “most immediate transportation needs.” The regular session ended in June without a transportation-funding agreement.
The governor said on Aug. 29 lawmakers will take up legislation to pay for “basic road maintenance and operations.” Funding would benefit the Oregon Department of Transportation, local governments and transit districts.
Failed plan
Oregon legislators failed to reach agreement on a long-term transportation-funding plan during the five-month regular session. A Democrat-led funding bill was touted to eventually raise $2 billion yearly in new and higher taxes and fees.
The failed bill, HB2025, included a 15-cent gas tax increase and an indexing component to allow for regular increases thereafter. The current excise rate is 40 cents.
Vehicle title and registration fees also were eyed for increases.
Registration fees for passenger vehicles would have increased by $70 from $43 to $113. New title fees would have been raised by $105 from $77 to $182.
A new road-usage charge for electric and hybrid vehicles was also part of the failed plan.
Weight-mile tax
A fix for the state’s weight-mile tax was also included in the failed transportation-funding bill.
The weight-mile tax is levied on commercial drivers. It is the subject of a lawsuit filed by the Oregon Trucking Association and three motor carriers.
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.”
Figures provided by the Oregon Trucking Association show the trucking industry pays 34% of all taxes owed by Oregon motorists, despite trucks representing only 14% of vehicle miles traveled in the state.
The lawsuit claims that the state’s weight-mile tax is unconstitutional because it forces truck drivers to pay more than they should be required to pay.
To address the issue, the transportation-funding bill called for revising the formula for weight-mile taxes.
Last-minute attempt also failed
A last-minute attempt to get a deal done before the regular session wrapped up included a 3-cent gas tax increase. Title and registration fees would have increased by $21 and $91 – down from $70 and $105.
The stopgap, HB3402, would have raised about $215 million yearly. All new revenue would have been earmarked for ODOT. Nothing would have been allotted for local governments.
The transportation-funding package fell apart after not enough of the supermajority Democrats were willing to approve the plan.
Governor’s transportation bill framework
The initial framework of the governor’s plan that is expected to be considered during the special session calls for a 6-cent increase to the state gas tax. To address what Kotek referred to as “ratepayer fairness,” the weight-mile tax on trucks would also be changed.
Vehicle registration fees would increase by $43. Title fees would increase by $139. Supplemental fees for electric vehicles would increase by $30.
“The special session will be focused on critical near-term solutions to stabilize basic functions at ODOT and local governments,” Kotek said. “This is just the first step of many that must be taken to meet our state’s long-term transportation needs.”
A requirement for a regular ODOT performance audit and increased legislative oversight are also included in the framework.
Another component of the transportation-funding framework calls for a 0.1% increase to the state’s payroll tax. Revenue from the increase would be routed toward public transportation.
Republicans call for prioritization
Statehouse Republicans continue to criticize plans for any tax or fee increases.
“If politicians tell you that they have to make your life more expensive and raise taxes to meet basic transportation functions – they’re lying,” House Republican Leader Christine Drazan posted on X. “Raising taxes and the cost of living on Oregonians is an unconscionable and deliberate choice.”
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
“To continue to fight for Oregonians, we have offered another alternative to the governor and her Democratic colleagues: use some of the hundreds of millions of dollars allocated to the Legislative Emergency Board to protect maintenance and preserve jobs that impact road safety.”…
— Oregon House Republicans (@OregonHouseGOP) July 28, 2025
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