Oregon Transportation Reinvestment Package Released
Several months ago, I wrote an article about the transportation road show, during which legislators traveled across the state to gather ideas on how to fund Oregon’s transportation system. On April 3rd, the Oregon Legislature’s Joint Committee on Transportation released a “starting point” for negotiations around a major transportation funding bill. The Oregon Transportation Reinvestment Package (TRIP) seeks to raise about $2.2 billion per biennium (every two years) from a combination of increases to existing fees and taxes and a few new ones. The package aims to close a projected revenue shortfall for ODOT that officials say would lead to an inability to maintain Oregon’s roads and bridges.
Of the $2.2 billion funding total, the TRIP proposal would raise $1.5 billion every two years through increases to the fuels tax and various vehicle registration fees. It seeks to raise the existing 40-cents per gallon fuel tax to 60-cents per gallon. The 20-cent increase would begin with an eight-cent increase in 2026 and would be staggered in four-cent increments every two years through 2032. The gas tax would also be indexed to inflation.
The motor vehicle registration fee (currently starts at $126) would go up by $66, and the cost of a title ($101) would go up by $90. The weight-mile tax, paid by freight haulers and based on a percentage of the weight of their truck, would increase by 16.9%.
A new source of revenue in the package is a vehicle privilege tax of 1% of the sale price, which would raise an estimated $486 million. It would be levied on all vehicles at the time of purchase.
A controversial new tire pollution tax would place a 3% increase on car and truck tire purchases and is estimated to raise $50 million. Hundreds of people submitted testimony, mostly in opposition, during a public hearing last month.
The current tax of $15 on bikes selling for $200 or more would increase to $24.50 under this proposal.
Another new revenue stream proposed in the package is a mandatory Road Usage Charge (RUC), also known as a pay-per-mile system. This would be a phased-in mandate that would apply to all existing electric cars in July 2026 and all new e-cars in 2027. It would apply to plug-in hybrids in July 2028 and all new vehicles with 30 mile-per-gallon or greater in July 2029. You would have the option to enroll in the program or pay a flat annual fee.
To fund transit, the TRIP would increase the payroll tax that funds ODOT’s Statewide Transportation Improvement Fund (STIF) from its current rate of 0.1% to 0.18%. This 0.08% would raise about $268.6 million.
As for how the funds will be distributed, about 90% of the newly proposed revenue would go into the State Highway Fund and be dedicated to maintenance and operations of the existing transportation system.
Of the $1.9 billion the package raises from the fuel tax and vehicle registration fee increases, $1.7 billion of that will be distributed via the traditional 50/30/20 State Highway Fund formula that sends 50% of revenue to the state (about $850 million), 30% to counties (about $510 million) and 20% (about $340 million) to cities.
$250 million of the fees will be set aside and spent on finishing highway expansion projects identified but not yet completed in House Bill (HB) 2017, which includes megaprojects like the I-5 Rose Quarter and the Abernethy Bridge project.
The package would allocate $17 million to maintain Amtrak service levels. Half of the tire pollution tax revenue will go to rail operations. The tire tax will also fund wildlife crossings and salmon restoration efforts.
The package will most likely change by the end of the session after public hearings and lobbying efforts of numerous organizations. How do you feel about this proposal? If you want to weigh in, please contact your state representative and senator to let them know what you think.
