Oregon Democrats unveiled a transportation budget framework that would raise more than $1.9 billion every two years in new taxes and fees.
State officials have maintained for multiple years that something needs to be done to address transportation-funding needs.
Inflation has resulted in rising road costs, and the gas tax rate – the main source of money for state and local roads – is not indexed. As a result, state officials said, the excise tax is hard-pressed to keep pace with funding needs.
Factors further complicating the decline of road revenue include more fuel-efficient vehicles and electric vehicles.
A year ago, the Oregon Department of Transportation warned 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. At the time, the agency said an additional $1.8 billion annually is necessary just to make repairs.
Additionally, a study from the Association of Oregon Counties showed that the state needs $834 million annually to maintain local roads and bridges.
To make matters worse for the state, a weight-mile tax levied on commercial drivers is the subject of a lawsuit filed by the Oregon Trucking Association and three motor carriers.
Weight-mile tax and gas tax
Truckers and some at the statehouse have been calling for action to rebalance the state’s weight-mile tax.
The state’s most recent Highway Cost Allocation Study showed that heavy vehicles were overpaying. Specifically, heavy-duty vehicles are expected to overpay by 32.4% during the next biennium.
In order to bring the heavy vehicle equity ratio back into balance, the study recommended it would be necessary to reduce weight-mile tax rates.
Rep. Anna Scharf, R-Amity, previously stated that 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.”
In an effort to address the concern, one part of the statehouse Democrats’ transportation budget framework is intended to help rebalance revenue collection from road users.
Instead of trimming the weight-mile tax, the framework calls for an increase to the state’s 40-cent gas tax rate. A 20-cent increase would be phased in over six years.
An 8-cent increase would take effect in January. Three additional 4-cent increases would be implemented every two years until January 2032. At that time, the tax rate would reach 60 cents.
After the gas tax increase is fully implemented, the rate would be indexed to inflation to “ensure future solvency of the revenue stream.”
The weight-mile tax would also increase by 16.9%.
Another change would reclassify diesel fuel as 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 vehicle fee increases
Vehicle registration fees would increase across the board by $66. Fees vary by vehicle.
Vehicle title fees would also be raised by $90. The fees now range from $90 to $190.
All vehicle tax and fee increases would raise $1.5 billion per biennium.
Additionally, a 3% tax would be added to tire sales.
Statehouse Republicans voiced concern about the transportation budget framework. They pointed to a statewide poll from early this year that showed more than three-quarters of Oregonians oppose tax increases and instead want tax cuts.
Rep. Shelly Boshart Davis, R-Albany, stated that it is “shocking” to see the plan after Oregonians made clear their resounding rejection of the proposal. Boshart Davis is a co-vice chair of the Legislature’s Joint Committee on Transportation and the owner of a trucking company.
A Transportation co-chair, Sen. Chris Gorsek, D-Gresham, said committee members are doing what they believe is necessary to improve transportation.
This afternoon, Democrats unveiled their grand Transportation plan framework. It threatens to increase or create over a dozen taxes to take billions more from Oregonians at a time when too many are struggling with some of the highest costs of living in history.
The proposal… https://t.co/YCagVe2fsa
— Shelly Boshart Davis (@BoshartDavisAg) April 4, 2025
New fees
The House and Senate majority plan also calls for charging light vehicle owners a per-mile fee for road use. The charges would be phased in by vehicle type over multiple years.
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 medium-duty vehicles (10,001-26,000 pounds) to deliver packages for personal or commercial use.
Existing registration fees now collected on these corporate delivery fleets would be eliminated.
House Republican Leader Christine Drazan described the majority plan as “tone deaf.”
“A dozen new taxes and fees is a slap in the face to all Oregonians that simply can’t afford to pay more for less,” Drazan said.
Gorsek said he is open to discussion on the plan.
“This framework is a starting point, and we are looking forward to sitting down with stakeholders and our colleagues on both sides of the aisle to finalize a package this session,” Gorsek said in prepared remarks. LL
More Land Line coverage of Oregon news is available.
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