Oregon Democrats Push $2 Billion Tax Hike to Fix Roads and Fund Transit

Oregon Democrats proposed a new transportation package under House Bill 2025 that contains critical funding for transit agencies across the state this week. The proposal suggests a set of controversial taxes to raise an additional $2 billion through new levies and increases.

Oregon HB 2025 Adds $2 Billion In Taxes To Support Transport Sector

Oregon Democrats proposed a new transportation funding package at a Joint Transportation Committee that could raise over $2 billion annually in new revenue, according to a draft estimate from the state’s Legislative Revenue Office.

HB 2025 mainly focuses on increasing transportation funding through a combination of taxes such as:

• Gas Tax: A 15-cent increase raising gas tax from $0.40 to $0.55 per gallon, with potential future increases tied to inflation.
• Vehicle Registration Fees: Significant increases in various vehicle registration and licensing fees.
• Vehicle Sales Tax: A new tax of 2% on the sale price of new vehicles and 1% on used vehicles valued over $10,000.

Significant funding would be allocated to the Oregon Department of Transportation (ODOT) to address safety concerns, improve road conditions, and mitigate wildlife collisions. The ODOT programs include:

• Orphan Highway Updates: Updating older sections of highways.
• Safer Streets: Improving safety around schools.
• Wildlife Collision Mitigation: Addressing issues related to wildlife-vehicle collisions.
• Great Streets Program: $125 million per year will be allocated to ODOT’s Great Streets program.

HB 2025 also allows for an annual fee instead of the mandatory per-mile road usage charge, with a provision to require many electric vehicle users to eventually pay a fee per mile driven.

This program could ultimately raise over $170 million per year but would cost the state approximately $15 million to launch and around $4 million annually to operate.

Democrats on the Joint Transportation Committee argue that the funding is necessary to maintain infrastructure across the state, but Republicans have countered that it’s a tax that Oregonians can’t afford.

The Oregon Transit Association indicated that passing HB 2025 will save transit service that Oregonians depend on every day.

The public hearings on the legislation concluded this week, and HB 2025 could move out of committee next week before it goes to floor votes in the House and Senate.