Oregon drivers are paying new transportation taxes, but the full price tag is on pause as voters prepare to have their say.
The Oregon Secretary of State’s office announced last month that a petition effort to halt multiple vehicle taxes and fees qualified for the November ballot.
The issue centers on a $4.3 billion transportation funding law signed in November. Democratic Gov. Tina Kotek said the law is needed to fix serious funding problems in the state’s transportation department.
Challenge takes next step
Republican lawmakers opposed the higher vehicle taxes and fees. They said the state should focus on ODOT’s main responsibilities instead.
Hoping voters agree, Republicans started a referendum in November. The effort would allow voters to decide on the transportation package.
The effort needed 78,000 signatures by the end of December to make the ballot. By late last month, state election officials had confirmed more than 163,000 signatures.
Because the referendum qualified for the ballot, several new taxes and fees are put on hold until voters can cast their ballots. Other tax and fee changes are still moving forward.
What’s on hold?
The biggest tax on hold is a 6-cent increase in the state gas tax rate. The tax was supposed to rise from 40 cents to 46 cents on Dec. 31.
The increase was expected to bring in about $90 million each year.
Higher registration fees for passenger vehicles are also on hold. The transportation bill calls for nearly doubling the base fee for passenger vehicles. The rate would increase from $43 to $85.
Another delayed charge is a fee based on a vehicle’s fuel efficiency. This fee was also set to increase on Dec. 31.
Vehicle title fees for these vehicles are also paused. These fees were supposed to jump from $139 to $216 on Dec. 31.
The referendum also targets a payroll transit tax. The tax funds public transit agencies throughout the state.
The new law would double the tax for two years. The rate would increase from 0.1% to 0.2%.
Kotek said delaying the tax and fee increases means fewer potholes will get fixed. She also said the state will have less money to clear roads of snow.
Senate Leader Bruce Starr said voters sent a clear message about taxes.
“They expect ODOT to be accountable for the money it already has, and they expect road safety and maintenance to be the highest priority – not an afterthought,” Starr said in prepared remarks.
What’s in place?
Several transportation taxes and fees are not affected by the referendum.
As of Dec. 31, extra fees for vehicles that get 40 miles per gallon or more, as well as for fully electric vehicles, increased by $30.
A new per-mile fee for electric and hybrid vehicles is also now in place.
Truck drivers also have tax changes.
Gone are the days of unfairness with weight-mile tax tables.
The Oregon Constitution says the state highway fund must be “fair and equitable to light and heavy users alike, to ensure that cars and trucks pay their fair share of the use of the road.”
State tax collections have not met this rule.
The new transportation law fixes this by simplifying how truck taxes are set. It reduces the number of weight-mile tax categories. Rates for each are also clearly set.
The number of weight-mile tax rates is cut from 85 to 10. Diesel fuel is also treated as a motor fuel rather than a use fuel.
Kotek’s administration said the changes will “simplify weight-mile rates to reduce weight-mile tax evasion and alleviate administrative burdens on trucking companies.”
The Oregon Trucking Association fought for the truck changes.
“This package is the most significant policy bill for the trucking industry in the past 30 years,” OTA President Jana 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.” LL
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