Oregon governor signs transportation bill raising truck, fuel taxes

By Keith Goble, Land Line state legislative editor | 8/28/2017

A new law in Oregon is touted to raise $5.3 billion over the next decade for transportation work.

Gov. Kate Brown is touring the state this week to ceremonially sign into law a bill to benefit major highway expansion and improvements to mass transit via new taxes and fees, including tolls.

“This transportation package is a roadmap to Oregon’s future,” Brown said in prepared remarks. “Not only will this package improve the safety and condition of our roads and bridges, it will support thousands of family wage jobs and help local business get their goods to market more efficiently.”

Specifically, HB2017 includes a sales tax on new vehicle purchases and higher vehicle title and registration fees.

A 10-cent increase in the state’s 30-cent fuel tax rate is also part of the plan. An initial 4-cent increase in 2018 will be followed by 2-cent increases every two years through 2024.

For professional drivers, proportionate increases will be applied to the weight-mile tax, trip permits, and variance permits.

The existing 16.38-cent per mile tax on large trucks will increase to 25.12 cents by January 2024.

Fuel-efficient vehicles will also have higher fees to help compensate for generating less fuel-tax revenue.

Half of the fuel tax revenue will be allotted for state transportation work, 30 percent will be routed to counties and the rest will be sent to cities.

A portion of the county revenue will be sent to Malheur County for a $26 million intermodal freight facility to transfer goods moved by truck onto rail.

The tolling provision is billed as a solution to raise revenue and to discourage people from driving during rush hour in the Portland area. Specifically, tolls would be added on Interstate 5 and Interstate 205 between their interchange and the Washington border.

Tolls, however, are not a done deal. The Oregon Transportation Commission must receive approval from the Federal Highway Administration by Dec. 31, 2018, to collect the tolls.

Advocates say tolls would help cover costs for an estimated $1.1 billion in congestion and freight relief projects in the Portland area.

The Owner-Operator Independent Drivers Association believes when there is a valid need to generate additional revenue increasing fuel tax rates is the most equitable way to accomplish that goal. Mike Matousek, OOIDA director of government affairs, has pointed out that any increase should be applied equally to both gasoline and diesel. He says that safeguards are also necessary to keep the additional revenue for roads and bridges.

In Oregon, new taxes also will be added to employee paychecks statewide to benefit public transit in non-urban areas.

Electric vehicle rebates are also included in the funding deal. As soon as mid-October, a $2,500 rebate will be available for the purchase or lease of an all-electric vehicle. Plug-in hybrid rebates will be $1,500.

In addition, a flat $15 fee will be added to certain bicycle sales of at least $200. The revenue will be used to help cover the cost of the rebates, as well as pay for bike and pedestrian infrastructure projects.

The Oregon Department of Transportation is also allowed to conduct a risk assessment before installing fences on overpasses. A 1993 law requires the agency to install fences on overpasses in an effort to prevent vandals from throwing objects onto traffic.

There remains a possibility that voters would make the final decision on any plan to raise taxes and collect tolls. Special interest groups have indicated they will pursue getting a question added to the May 2018 primary ballot.

To view other legislative activities of interest for Oregon, click here.

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