Oregon Democrats set near-final tax proposals for major transportation package

Key Oregon Democrats have nearly finalized the list of tax hikes they say are necessary to boost the state’s transportation network and better maintain Oregon’s roads and bridges.

In a two-page informational document circulating the Capitol, Democrats propose raising the state’s gas tax from 20 cents to 35 cents, increasing title and registration fees, bumping up fees on truckers and requiring electric vehicles to pay a fee per mile driven, along with other increases.

This latest proposal, which reflects the contents of a forthcoming bill, includes similar tax increases as a framework put forward by the Democratic co-chairs of the legislative transportation committee in April.

Democrats, who hold a supermajority in both chambers and could theoretically pass any tax hikes along party lines, have signalled for months that any transportation package that moves forward this year will include tax hikes to better maintain Oregon’s roads and bridges.

But this plan does not include two of the tax hikes proposed in April and would not raise the gas tax as high as previously proposed. Those changes came after weeks of private negotiations by a small group of Democrats and Republicans.

This proposal, obtained by The Oregonian/OregonLive Friday, proposes raising the state’s gas tax to 30 cents next January and to 35 cents in 2028. It also suggests raising all vehicle title fees by $70 and registration fees by $50.

Those tax hikes, combined with higher taxes on truckers, commercial delivery businesses and electric vehicle drivers, would go to the State Highway Fund, which funds the Oregon Department of Transportation and allocates transportation funding to cities and counties.

The plan also proposes raising the state’s 0.1% payroll tax, which funds public transit programs statewide, to 0.3%. That increase is higher than what the Democrats proposed in April, but it is lower than what a group of progressive Democrats say is necessary to adequately fund such programs.

The proposal suggests introducing a 2% transfer tax on new vehicles and a 1% tax on used vehicles. Most of the revenue from those would be used for bicycle and pedestrian infrastructure and safety programs, and another portion would help the state pay off debt on major projects.

Top Democrats have said they want to secure bipartisan support for the package, but it’s unclear how many Republicans will support this package of tax hikes. Rep. Susan McLain of Forest Grove and Sen. Chris Gorsek of Gresham, the Democratic co-chairs of the transportation committee, did not immediately respond to requests for comment Friday.

The plan gives few specifics as to ensuring the Oregon Department of Transportation effectively spends any new revenue, something that lawmakers of both parties have both said is vital to a package. The two-page document suggests “frequent performance audits” and more legislative oversight of megaprojects as new accountability measures for the agency.

Lawmakers have less than four weeks to pass a package this legislative session. Once a bill is introduced, legislators plan to hold multiple public hearings on the proposal.