Reaching consensus on a transportation-funding deal at the Oregon statehouse continues to be a work in progress.
Democratic lawmakers previously made public a transportation budget framework. House Republicans soon followed up with their own proposal to get transportation work done. The GOP plan doesn’t include new taxes or fees.
In the weeks following, majority Democrats have spent time working with select Republicans to tweak the transportation-funding package. Once fully implemented, the updated plan is estimated to raise $2 billion yearly in new taxes and fees.
Half of the funding would go to the Oregon Department of Transportation. Counties would receive 30%. Cities would get the remaining 20%.
A consensus between the parties on transportation funding must be reached by the end of the month. The regular session must adjourn no later than June 29.
Transportation-funding concern
State officials have said for years that inflation has resulted in rising road costs.
To make matters worse, the gas tax rate is not indexed. As a result, they’ve said, the excise tax is hard pressed to keep pace with funding needs.
Factors further complicating the decline of transportation revenue include more fuel-efficient vehicles and electric vehicles.
Pressure to get a long-term plan in place to address transportation funding was heightened following an Oregon DOT warning. The agency said that without a radical funding fix in place by 2027, the state will be forced to go without repairs to any roads that are not a federal interstate. The agency also said an additional $1.8 billion annually is necessary just to make repairs.
Gas tax increase
The revised plan includes a 15-cent gas tax increase. A 20-cent increase over six years was initially floated.
The bill, HB2025, would increase the 40-cent excise tax by 10 cents on Jan. 1, 2026. Another 5-cent increase would take effect on Jan. 1, 2028. At that time, the gas tax rate would be 55 cents.
Once fully implemented, the tax rate would be indexed to inflation. Indexing allows for annual increases to the tax.
Weight-mile tax
One issue addressed in the bill is the state’s weight-mile tax.
The 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 truck industry paid 34% of all taxes owed by Oregon motorists, despite trucks representing 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, one part of the 102-page transportation-funding bill would revise the formula for weight-mile taxes.
Changes in weight-mile tax tables would be made over eight years.
Another change would reclassify diesel fuel. Instead of being classified as use fuel, diesel would be a motor vehicle fuel.
The switch is intended to “simplify weight-mile rates to reduce weight-mile tax evasion and alleviate administrative burdens on trucking companies.”
Other tax and fee increases
Vehicle title and registration fees would also increase.
Registration fees for passenger vehicles would increase by $70 from $43 to $113. New title fees would also be raised by $105 from $77 to $182.
A 3% tire sales tax initially included in the Democrats’ transportation-funding plan has been removed.
Included in the latest version of the plan is a new road-usage charge for electric and hybrid vehicles.
A new 2% tax on new car sales would be added. A 1% tax would be collected on certain used car sales.
Corporate delivery fleets that include Amazon, FedEx and UPS would have a road-usage charge. Affected fleets are defined by the state as operations with at least 10 vehicles (8,001-26,000 pounds) that deliver packages for personal or commercial use.
The Joint Committee on Transportation is scheduled to hold a work session this week on the bill.
Committee Co-Chair Sen. Chris Gorsek of Gresham previously said committee members are doing what they believe is necessary to improve transportation.
Yesterday I testified on behalf of Oregonians and their families who cannot afford the 35+ new tax and fee increases included in HB 2025.
The last time politicians raised billions in taxes for transportation, we were promised better roads, safe bridges, and faster commutes.… pic.twitter.com/HLQWiJIiHG
— Christine Drazan (@ChristineDrazan) June 13, 2025
GOP offers alternative plan
House Republican Leader Christine Drazan has described the majority plan as “tone deaf.”
Statehouse Republicans have pointed to a statewide poll from early this year that showed more than three-quarters of Oregonians oppose tax increases. Instead, residents want tax cuts.
A proposal introduced by House Republicans to address transportation-funding needs does not include tax or fee increases.
The minority party’s plan is touted to prioritize core functions of the Oregon DOT. “Non-essential programs and divisive agendas” would be sidelined, while the plan would protect federal transportation funding and preserve critical road safety services.
The caucus identified $730 million in refocused spending, cost savings and spending cuts.
“ODOT should have to prove they are responsible stewards of hardworking Oregonians’ money, and House Bill 2025 is a slap in their face,” Rep. Shelly Boshart Davis, R-Albany, posted on X. LL
More Land Line coverage of Oregon news is available.
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