Democrats in Salem have made their final play in a desperate attempt to curry support for their transportation funding plan. With just a few days left in the legislative session, the latest move to find support for House Bill 2025 includes major changes and one final stop in committee before what will be an all-out sprint to the finish line.
The bill, known as HB 2025-A28 will get its final public hearing and committee vote later this afternoon.
As I reported yesterday, the version of HB 2025 that was adopted by the Joint Committee on Transportation Reinvestment (JCTR) six days ago, known as HB 2025-A, has been amended. Documents posted to the legislative website Wednesday afternoon reveal a new bill with a smaller tax footprint that omits several provisions that spurred opposition among moderate Republicans and even some Democrats.
The authors of the bill need to do three things in very short order to fulfill their top priority of the session: pass the bill out of committee, get three-fifths majority on the House floor, and make sure that the language of the bill doesn’t spur a ballot referral.
To Democratic leadership, this means the bill needs to be less of an easy target to lawmakers and voters who think it takes too much out of their wallets. Their latest changes to the bill shrink it by $3 billion. According to OPB, the state would take in about $11.6 billion in new revenue over the next 10 years with the newly amended version of HB 2025, instead of $14.6 billion in the bill passed last week.
Democrats have also caved on their plan to raise the gas tax and index it to inflation. The original bill would have raised the per gallon gas tax by 15 cents in the coming three years, followed by an automatic increase pegged to annual inflation rates. In committee hearings, Republicans strongly opposed indexing the gas tax to inflation because they feel it would abdicate their power.
The newly amended bill scraps the indexing plan and would simply raise the gas tax by 12 cents starting next year.
Another way the Democrats have scaled back the bill is to give up on a new “transfer tax” that would have been levied on the retail price of used and new vehicles at a rate of 1% and 2% respectively.
To make up for that revenue loss, the new plan is to increase the dealer vehicle privilege tax and general vehicle use tax. That tax is currently 0.5% and applies only to new cars. It was boosted to 1% in the current version of the bill. The latest proposal is to increase it to 2.25% and apply it to used cars for the first time.
Money raised from the privilege tax would be distributed to these projects and programs:
- 38% to the Great Streets Fund, which invests in urban state highways to make them more humane, main streets.
- 38% to the Anchor Project Fund, the new name for what lawmakers say is “unfinished business” from the previous transportation package that mandated completion of key megaprojects like the I-5 Rose Quarter, Abernethy Bridge, I-205 widening, and so on.
- 10% to the Zero Emission Incentive Fund, which gives out rebates for purchasing electric cars (but not electric bikes because once again the legislature has failed to create equity between cars and bikes in that program).
- 8% to the Connect Oregon Fund, which invests in non-highway infrastructure like airports, marine terminals, rail, and some biking and walking projects.
- 6% to the Railroad Fund which can be spend on passenger rail maintenance and operations.
Money raised from the use tax would be spent as follows:
- Up to $5 million to the Wildlife-Vehicle Collision Fund
- Up to $25 million to the Safe Routes to School Fund
- Anything left over would be distributed via the 50/30/20 formula to the state, counties, and cities respectively.
Another hot-button issue with the version of the bill was the volume and size of increases to dozens of vehicle-related fees such as ones folks pay at the DMV for titles, registrations, new license plates, and so on. The new bill slashes those increases by significant amounts.
One final change I’m still trying to fully understand is how the new bill handles the bicycle tax. HB 2025-A kept the $15 tax on new bicycle intact. HB 2025-A28 appears to fold the bike tax into the general vehicle use tax, meaning it will now be a more progressive, percentage-based tax of 1% of the purchase price of a new bicycle. (Note: I’m still trying to find clarity on this provision and will update this post when I figure it out.)
Those are the big differences with the newly amended bill. It will get a public hearing and final vote in the JCTR today at 3:30 pm. From there, it should move onto a floor vote. According to OPB, the extremely tight timeline means Democrats need some procedural help from Republicans to get it over the finish line. I’ve heard some Democratic support for other bills this session authored by Republicans have created the opportunity for this to happen, but there are no guarantees.
Stay tuned. This bill could pass or fail. It’s anyone’s guess at this point.