As Democrats in Salem scramble to pick up the pieces of the transportation bill in the final few days of the legislative session, I feel like it’s worth looking more closely at what’s in the bill they’re trying to pass.
With headlines devoted to the drama of the process and Republican opposition, some folks might forget what’s at stake with the actual policy that hangs in the balance.
But first, let’s recap where things stand: House Bill 2025-A passed the Joint Committee on Transportation Reinvestment (JCTR) on Friday with a party-line vote of 7-5. It was due for a floor vote Monday, but instead, Democrats pulled the bill and referred it back to committee. Lawmakers likely did this for two reasons: either they were afraid the bill didn’t have enough votes to pass, or they worried it would be referred to voters, something one group is already vowing to do. Sources say authors of the bill are currently revising some elements of the package to make sure the vote will go their way. Those changes should be made public any day now. Once they’re out, the floor vote would happen quickly. Since Democrats have a super-majority they need to pass tax increases, as long as they get their party in line (and Republicans don’t pull procedural shenanigans), the bill will pass.
So what’s in the bill? Yes it’s a big tax increase. But Oregonians have been underpaying for their privilege to use the transportation system for too long and the bill has finally come due.
Here’s what we’d gain and lose (in terms of money in our pockets) with HB 2025-A:
10-Year Revenue Outlook
Over the next 10 years (the state budgets in two-year cycles called biennia), the bill’s fees and taxes would generate about $14.6 billion. Because the fees and taxes come into effect at different times and get progressively higher over time, here’s how the biannual revenue would play out:
- 2025-2027: $1.06 billion
- 2027-2029: $2.5 billion
- 2029-2031: $3.4 billion
- 2031-2033: $3.7 billion
- 2033-2025: $4.0 billion
Accountability
I personally don’t think the accountability measures go far and deep enough, but here’s what HB 2025-A would do:
- Mandate performance audits every other year on capital projects and state highway fund spending.
- The Governor would appoint ODOT director, instead of the Oregon Transportation Commission (this is a charade, as pointed out by City Observatory).
- The bill beefs up the existing Continuous Improvement Advisory Committee membership, meeting requirements, and reporting responsibilities.
- Mandates a review by the Joint Committee on Transportation of all major projects over $25 million on a quarterly basis. The committee would look at cost, scope, and schedule changes to make sure there’s no funny business going on.
- The Legislative Policy and Research Office would do an audit of ODOT on whether and how the agency addressed recommendations from study conducted this year.
Where Revenue Would Come From
Weight Mile Taxes
The bill would simplify weight mile tax tables for heavy trucks, making it simpler for freight haulers to comply. It would also create a new weight mile table heavy electric vehicles that are over 26,000 pounds.
Gas Tax Increase
HB 2025-A would raise the gas tax by 10 cents, to 50 cents per gallon starting January 1, 2026. It would go up to 55 cents per gallon in 2028, and then starting 2029 it would be pegged to inflation.
Payroll Tax Increase for Transit
While the Republicans pushed a bill that would have zeroed out state spending on transit, HB 2025-A will increase transit spending via an increase in the payroll tax. Currently at 0.1%, the bill increases the tax to 0.3% by 2030. Revenue from this tax funds the Statewide Transportation Improvement Fund, or STIF.
Vehicle Privilege Tax
The vehicle privilege tax is paid by car dealers (for the privilege of selling cars in Oregon). It’s currently 0.5% of the retail price of a car and would increase to 1%. Since this tax is not levied on road users, it’s not constitutionally bound to the State Highway Fund. Therefore, lawmakers would use 50% of revenue for passenger rail improvements and the remainder would go toward EV rebates and the Connect Oregon fund (a program that funds non-highway projects).
General Vehicle Fee Increases
HB 2025-A includes dozens of fee and tax increases to things like DMV-related services, new and used car titles, registrations, vehicle permits, and so on.
Transfer Tax
This is new tax that would be levied on the transfer of new and used vehicles with a gross weight of 26,000 pounds or less and that are sold for over $10,000. Tax rate is 2% of the sales price for new vehicles and 1% of the sales price for used vehicles.
Bicycle Tax
The $15 tax on new bicycles that went into effect in 2018 will remain in place. It amounts to about $1.2 million per year.
Road Usage Charge
HB 2025-A will finally push Oregon’s “OreGo” pay-per-mile road usage charge program into the limelight. The bill will give Oregonians an option of participating in the program for a flat fee of $340 per year.
The bill will also require owners of delivery fleets to enroll electric fleet vehicles into the OreGo program. Then, starting in 2028, all plug-in electric vehicles, plug-in hybrid vehicles, and hybrid vehicles will be required to enroll.
The per-mile charge for the OreGo program will be pegged to a percentage of what the average cost of a price of gas is per gallon.
Where Revenue Would Go
Gas Tax
The gas tax increase would help fund five “anchor projects” to the tune of $125 million per year (which would still leave huge funding gaps). The top two priority projects are the I-5 Rose Quarter and Abernethy Bridge. Then the OTC would determine priority for funding of I-205 widening, Newberg-Dundee Bypass, and State Highway 22/Center St. Bridge retrofit.
Any remaining gas tax revenue would be distributed via the standard 50/30/20 formula to ODOT/counties/cities respectively.
Transfer Tax
$125 million per year from this tax would go to the Great Streets Fund, a fund that pays for ODOT urban highways to become city-owned main streets (like 82nd Avenue). $25 million would go to Safe Routes to Schools, and $5 million would be put into a new Wildlife-Vehicle Collision Fund.
An additional $125 million from this revenue source would go to paying for debt service on anchor projects (a.k.a. highway expansion megaprojects).
Miscellaneous (Yet Still Very Important!) Provisions
Highway Cost Allocation Study
The HCAS is a study that determines whether or not Oregon road users are paying their fair share. I profiled the issue last year because it’s something freight advocates have been complaining about for a long time. This bill would remedy the issue by calling on the legislature to act if the equity ration between heavy and light vehicles ever goes beyond 1.05%.
Freight Lane Widths
There was a lot of controversy around the initial language of this provision in the bill. Lawmakers changed that language a bit to clarify that 12-foot minimum lane widths would only apply to state highway freight routes that are outside the urban growth boundary.
More Funding for Light Rail Maintenance
Section 170 of the bill would stipulate that revenue that comes into the STIF (the state’s transit funding program) can be spent on light rail capital expenses related to maintenance of existing light rail infrastructure. Currently, these funds cannot be used for this purpose.
Better Highway Project Selection
When the Oregon Transportation Commission considers projects for the Statewide Transportation Improvement Program (STIP), the bill would require them to weigh whether or not a project “reduces overall demand for motor vehicle travel on a highway,” and whether or not the local jurisdiction has made a good faith effort to maintain and preserve highways (as opposed to just building new ones).
Funding for Oregon Community Paths
The bill would deposit $2 million annually from a portion of the gas tax that’s collected from non-highway uses (like gas for lawnmowers, etc…) into the Multimodal Active Transportation Fund. This fund invests in off-street biking and walking paths and what’s known as the Oregon Community Paths program. The initial bill left this funding out and advocates pushed hard for this.
New ODOT Studies
Don’t sleep on studies! These can often provide a foundation for future policy. HB 2025-A directs ODOT to study allowing all entities (cities and transit agencies) that receive STIF funding to provide transit passes for people under 23 years old. Another study would look at the impact on travel demand for any project that expands driving capacity.
Commuter Rail Expansion
The bill would require ODOT to do a formal study of the expansion of TriMet’s Westside Express Service (WES) to Salem and Eugene. This heavy rail service currently runs north-south between Beaverton and Wilsonville.
No E-Bike Rebate This Session
Note that the e-bike rebate program, which I was hopeful would make the cut when it was included in an amendment last week, is no longer part of the bill.
So there you have it: the major highlights (or lowlights depending on your political persuasion) of the transportation bill as it stands right now. Like I said, there’s a lot at stake here and despite how terribly Democrats have fumbled the bag so far, there’s still a shred of possibility that a bill passes this week. I fully expect lawmakers will propose some changes in the next 24 hours, so stay tuned for that in the coming day or so. There should be some sort of committee meeting Thursday and it will likely include a public hearing. Buckle up!
UPDATE: The newly amended bill has been released and a public hearing and work session are scheduled for tomorrow (6/26) at 3:30. There are some significant changes. See this story from OPB for a good rundown of what’s in the amended bill.
Thanks for reading.
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The City Observatory article you linked to is a great read. Thank you!
“ODOT’s managerial blunders and massive cost-overruns (quite logically) raise major questions about the wisdom of giving them even more money.
So the state throws money at management consultants, who generate a buzzword-filled report about how ODOT could improve.
The Governor promises that ODOT will implement these recommendations.
Voila! Accountability.”
I’m still not clear why so many here are excited about the tax increases when there has been no demonstratable assurances that any of the raised money will actually go to improvements the average citizen will notice. I’m sure the consultants, non-profits and politicians will notice the increase in funding, but I am cynical that any of it will improve anything.
“ODOT and the Legislature have hired two firms to do a “strategic review” and a “managerial assessment” of ODOT. Instead of McKinsey, this time, the state has hired two of its biggest engineering consultants WSP, (which has billed $70 million for its work on the Interstate Bridge), and AtkinsRealis (which just bought David Evans and Associates, which is the second largest contractor for the I-5 Rose Quarter Project).”
At least there is plenty of money for the usual suspects who have been profiting off of carcentric planning for quite awhile.
I’m personally excited about tripling the statewide transit revenue. So many small agencies in Oregon (everything that isn’t LTD or TriMet) rely on this as their sole source of revenue, and transit outside of Portland and Eugene tends to be barebones to the extreme. Tripling the funding that Cherriots, Cascades East Transit, and the other county-level agencies in rural Oregon receive should have an immediate and major impact on transit-dependent people outside of Portland and Eugene. I’ve been out of grad school for a few weeks now, and there are places I would strongly consider working if public transit options were more practical (Columbia, Yamhill, Clatsop, and Hood River Counties). Outside the direct benefit to county transit providers, ODOT’s public transit division does really good work despite the limited budget. More money could mean restarting intercity bus service from the Valley to Southern and Eastern Oregon, something that has been sorely missing from the state transportation network since Flix/Greyhound got off those routes, and something that will immediately benefit tons of people – especially outside of Portland.
I have little interest in increasing funding for ridiculous projects like the Rose Quarter and other “key” projects identified, but think a gas tax hike is at least a fair-ish way to pay for it. Beats general fund bonding anyways, which we are doing anyways but that’s a tangent outside this funding bill.
I agree that most of the allocated studies to big consultants will miss why ODOT goes so far over budget, and that these studies are unlikely to change the underlying causes. Too many incentives for ODOT management to overpromise projects while underestimating budgets with the expectation that they will be bailed out of these choices. This whole transportation funding work has been framed by this, since half these projects were supposed to be funded by the last “generational investment” but still haven’t got off the ground.
First of all……CONGRATULATIONS on Graduation!! Good luck on all that is to follow 🙂
Second of all…. I agree that the benefits to more rural areas will be beneficial. In a way, the deliberate decrease of car use could easily surpass the urban areas with people deciding to make the change if enough funds reach the ground to make a difference as you have mentioned. When I was out in La Grande and surrounding areas in the 2000 teens it was not feasible to rely on public transportation although it did exist. I just hope the money actually finds a way to make it to where it’s needed to improve people’s ability to be carfree and independent.
Global heating and sea-ice loss is accelerating well-beyond modeled worst case scenarios so this pathetic and amoral bill is just another example of liberal/progressive climate crisis denial.
But Mr. Wheeler told me that Teslas will put ice cubes back in Greenland! And as we all know, a car’s ice cube melter (aka exhaust pipe) is the sole source of ice cube melting worldwide! Problem solved! Suck it eco nerds!
Electric cars (including Teslas) are essential to slow climate change. No need to exaggerate; it’s something that every responsible climate researcher agrees on.
Especially now that (as OPB reported) has tax increases have been reduced or eliminated.
Some math on the OreGo pay per mile (to be required for electric cars, plug in hybrid, and eventually all cars with > 40mpg capability).
Fee will be pegged at 5% of gas tax per mile.
n other words, these vehicles will pay the same per mile as a 20mpg (i.e. heavy) vehicle.
This does not seem ‘fair’ to small hybrids / electric vehicles which produce much less wear on roads than a 20mpg truck.
Let along the environmental impact.
I understand that we need a strategy for electric vehicles to pay a share but lop-siding in the opposite direction is not progressive.
JohnR, please provide the link to any supporting calculations that show EVs producing less wear on road surfaces than ‘a 20 mpg (i.e. heavy) vehicle’. In theory you are correct, that is if folks in the USA were trading in their old detroit gas guzzlers for Smart Car / Fiat e500 EVs but they are instead trading them in for very heavy SUV EVs with long range battery packs. Plus these heavy EVs have much higher torque and acceleration (proxy shown thru tire wear) that will place greater wear on roads too. [Research is starting to show a ~200% higher road damage rate with EV fleet adoption, issues like accelerating pavement distress accumulation, etc.]
I didn’t mean to generalize that all EVs give less wear. Rather that there is a good correlation to gross weight and the bill does not address this at all.
Example:
Cyber truck: 6500lb. $.02 / mile tax
Nissan leaf: 3500lb. $.02 / mile tax
F150 (V6, ~20mpg): 4500lb. $.02 / mile tax
Toyota Prius (~50mpg): 3000lb. $.008 / mile gas tax + $.02 / mile OreGo tax
So, the Prius driver pays the most on a $/mile/ton basis. The Cyber truck pays the least.
The OreGO tax should be prorated for vehicle weight. Leaf != Cybertruck.
Sales tax kicks in at $10,000? I think there will be a huge increase in the number of vehicles that get documented as being sold private party for $9,999.
Does it kick in for the whole price or only the amount above $10,000? I had assumed the latter, not the former.
“The vehicle privilege tax is paid by car dealers”
LOL. Maybe technically, but it’s passed 100% on to the buyer. Just like the PCEF and other taxes that “only the big bad evil corporations will pay”. We all know it’s the end consumer that really pays.
Having bought a new car and new motorcycle since the 0.5% has been in place I can attest that it is always passed on to the buyer.
So if an Electric Bike that fails to meet the legal definition of an EV bike under Oregon law. Shouldn’t it be subject to this tax. It is resides in the gray area of being a Moped. I believe mopeds are considered motor vehicles.
For the vehicle privilege tax, it’s probably fair to say that the consumer pays most of the tax, since there aren’t other options for car purchase (though in Portland, maybe this will result in car buyers going across the Columbia – but no idea in practice on if that’s practical). For PCEF, it’s less clear, since not all retailers pay and there’s a theoretically competitive market in whatever good a consumer is buying (actual market competitiveness varies by good), which makes it more difficult for the retailer to pass the full tax on to the consumer.
Straight from the Oregon.gov site.
Two Oregon vehicle taxes began January 1, 2018:
One-half of 1 percent (.005) is due on the retail price of any taxable vehicle.
A certificate of Vehicle Use Tax Payment is required by DMV on certain out-of-state purchases. To determine if your vehicle is subject see criteria below.
The Vehicle Privilege Tax is passed on to the customer. There may be some dealers that do not pass it on but I’m skeptical.
In general for tax incidence, though the mantra “if they can, they will” is illuminating. I would say that most dealers will pass the tax on, since they are not generally subject to direct competition from sellers who do not have to pay the tax. The larger point of the comment is with regards to PCEF, where large retailers are (in theory) in direct competition with small retailers who do not pay the PCEF tax, and so have a lessened ability to pass the tax on in the form of higher prices to consumers. And depending on how elastic demand is, they may not be able to raise prices significantly either.
How about adding something like:
If, in any given year, the fuel tax revenues collected are less than 80% of the average transportation funding needs for the next biennium (calculated over the past three years [or similar period]), then the state will implement tolls to help make up the shortfall. These tolls would be applied:
[Needs more word smithing.]
The tolling gantries and equipment would be left in place – but turned off – in years where revenues and budget expenditures are within allowed ranges.
So what’s in the bill? A big tax increase. Oregonians underpaying for the privilege to use the travel system too long and the bill has come due.
Here’s what we’d gain or lose (pocket money) with HB 2025-A:
Where Revenue Would Come From?
Weight Mile Taxes – heavy long haul trucking. PHEV vs BEV? I say PHEV+HGas Tax Increases – from 40 to 50 cents a gallon by January, a nickel more 2 years later.Payroll Tax Increase for Transit – Dollars misdirected to poorly engineered light rail and bus fleet investments. Vehicle Privilege Tax: The privilege tax is paid by car dealers for selling cars. 0.5% retail price of a car doubles to 1%. GOOD! The tax is not levied on road users and is NOT constitutionally bound to the State Highway Fund, therefore, lawmakers use 50% for passenger rail with the remainder toward EV rebates and the Connect Oregon fund (a program that funds non-highway projects). “Just say NO to bullet train HSR” on the Amtrak Cascades.
General Fee Increases: Fees and DMV servicesTransfer Tax: “Getting junked polluting trucks back on the road.”Bicycle Tax: Apparently not working very well.
HB 2025-A will push Oregon’s pay-per-mile usage charge that gives Oregonians an option of participating for a flat fee $340 per year. The bill requires delivery fleet owners to ‘invest’ in EV fleets for the Orego program. In 2028, all plug-in electric vehicles (BEV), plug-in hybrid vehicles (PHEV), and hybrid vehicles (HEV) are required to enroll with the per-mile charge for OreGo is pegged to a percentage of the average price of gas per gallon.
This is a catagorized roughly 10 priority issues from Weight Mile Taxes
to General Fee increases. The Portland Green Loop bike design team have a ruinous plan for the federal post office park space. Moreover, the entire North & South Park Blocks Green Loop removes many dozens of heritage trees for a driver’s side sidewalk and separately paved bikeway in every Park Block. It’s more bad engineering from PBOT.
REJECT THE MEASURE — ODOT’s Rose Quarter so-called “improvement” will actually worsen traffic hazards. So too would the SW Corridor MAX debacle. The latest on the Columbia River I-5 Bridge project IBRP is too similar an example of ODOT, Metro and Tri-Met promising much while delivering the least.
TriMet isn’t going to be crossing the bridge so they should definitely be kept out of any planning. Buses can go where cars can and there won’t be any bus stops on the bridge. TriMet’s input is not wanted or welcome.
In every iteration of the plan I’ve seen, TriMet MAX Light Rail trains are crossing the bridge in some way. And transit integration on this project is extremely crucial, regardless of mode, as C-TRAN spends a very significant portion of its budget running services across the I-5 bridge, and will massively benefit from some kind of dedicated transit right of way. And this project (for better or worse) is about way more than just the bridge – it’s about widening like 4 miles of I5 from the MLK interchange to WA 500
Again with the weird Trimet stuff.
MAX is going to be on the bridge. Where have you been?
It’s worth pointing out that all of the light rail engineering work state-wide has been done by TriMet, and the primary funding mechanism for TriMet is their own payroll tax, which is separate from the state one. In the FY2026 budget, they get about $550M from this. The state payroll tax funds a variety of things, one of which is STIF, which is essentially how ODOT contributes in-kind for grants to TriMet. The total allocation of all state, federal, and local grants to TriMet is $230M for FY2026, most of which probably is not coming from the state. For most MAX capital projects, 60% of funds came from the FTA (50% for the Orange Line), so I would think that ~$150M of that $230M is federal, with the rest being state and local. Little, if any, of the state payroll tax $$ will go to MAX operations or maintenance.
Bus fleet investments are good and necessary for the function of a transit agency, and STIF funds play a big role in ensuring that small transit providers throughout the state can purchase new vehicles. To some extent, all transit agencies in Oregon are pursuing poorly articulated and financially dubious battery electric bus fleet replacement programs, but I don’t think stripping funding from these agencies is a sound solution to solving that.
Financially dubious, perhaps, but environmentally sound. We need to stop burning fossil fuels. Full stop.
(Maybe wiring the entire city with overhead catenary wires makes more sense, but I doubt it. I’d have to see some numbers to be convinced.)
The flaw in your comment regarding financially dubius battery electric bus fleets is its neglect of more pertinent flaws in common city bus models which do NOT convert to EV adequately NOR are they suited for stop-n-go circuitous routes. Plug-in Hybrid PHEV tech is certainly best for long-haul freight truck fleets. Either combustible or fuel cell hydrogen PHEV+H matched to a relatively small battery pack. Any financial concern pales in comparison. Daimler should convert the factory to PHEV production.
I can’t speak to specific models of electric buses, but I do know that EVs are generally pretty good in stop-and-go due to regenerative braking.
If you think battery buses are financially dubious but hydrogen buses are not… well, let’s just say we think differently. But ultimately I don’t care — I’ll leave it to the big brains at TriMet figure out the best solution, so long as they stop burning diesel already. I mean seriously… stop.
Here is a somewhat limited case study making a fairly strong case for trolleybuses over battery electric buses. The primary drawback of battery electric buses is the increased fleet size required for maintaining the same level of service (as more contingency is needed to account for charging time), and some of the capital costs associated with catenary wires can be greatly reduced by using small-battery trolleybuses + en route charging (reducing the need for complex junctions and vastly improving reliability).
But of course, TriMet isn’t even aware that trolleybuses exist, despite being extensively used in the our fellow PNW metropolises.
I’m quite sure TriMet has considered them and have found them unsuitable for some reason or another — as the article said, their benefits are very situational.
Battery technology is evolving rapidly; one Chinese car manufacturer has started using sodium-ion batteries which can be charged very rapidly (and are cheaper, too, and don’t use lithium). Maybe there are more options now than when that article was written. And unlike buses in the article (which required overnight charging) even Li-ion batteries can be charged pretty rapidly (see Tesla).
And what if we got a hot day and the wires sagged and all the buses had to shut down? TriMet does not exactly have a good record in that department.
In TriMet’s old alternative fuel bus study, trolleybuses were given no consideration.
There are cost, battery capacity, and battery longevity arguments against rapid charging. For a high-capacity, low-range vehicle (which a BEB would be), repeatedly charging very frequently is more time-efficient (since charging at lower battery levels is faster), but less cost-efficient (since power costs are generally higher during transit operation periods). And even in best-case scenarios, end of route charging is limited and likely requires more vehicles to be in service. On a 15-minute service route that requires 6 buses to operate (implying a 45 minute one-way trip), if 15 minutes of fast charging is needed every other run, that’s an entire additional bus needed to maintain the set 15 minute headway, meaning we now need 7 buses to operate the route effectively. That isn’t an avoidable cost.
With a hybrid trolley-BEB system, en-route charging reduces the need for additional buses to maintain set frequencies, and the battery storage allows for more flexible operations. There still may be some hot weather issues, but I have to assume this can be mitigated using a constant tension wiring system. As I understand it, sun kinks are probably a greater issue for the MAX on 100F+ days, since most of the (higher speed) parts of the TriMet system operate with constant tension overhead catenary.
The issue with battery systems isn’t so much technological as physical. It’s much less efficient to lug all your electrical power around with you, and trolleybuses will always have that to their advantage. Even if there have been exciting developments in battery energy density, I feel that TriMet should not be speculating on this reaching the mass-market, and would prefer a time-tested solution like a trolleybus to reduce risk.
Every transit agency is aware of trolleybuses, but no one is building new ones anywhere. In fact, several agencies have recently removed lines.
Must be some kind of conspiracy.
This is patently false. Many cities in Italy, Czechia, and China are building new networks or expanding existing ones. Marrakesh is also building a new trolleybus network, and I think Mexico City is expanding theirs too.
Sure, no US cities are currently building new trolleybus networks, but I don’t generally look to the US for good transit policy. Short-sighted, anemic, poorly articulated transit policy is our jam here!
Only $2 million for paths. What will that build? – five miles of path somewhere?
Seems pathetic, given the hundreds of million$ being thrown at highway expansions.
I’d like to see more money for paths too, but keep in mind this is just one source of revenue for this program. It also gets Lottery and connect Oregon money. And grants.