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!
