FILE – Money to pay for a major project on Interstate 5 in Portland’s Rose Quarter is included in a transportation funding bill lawmakers plan to unveil next week.
Bradley W. Parks / OPB
Oregon lawmakers would hike the state’s gas tax by 15 cents and increase or institute nearly 10 new taxes or fees under a transportation funding proposal expected to be released in coming days.
The plan, laid out in a summary that has been circulating in Salem and beyond, amounts to Democrats’ best attempt to assemble a package that can mollify at least some tax-leery Republicans and satisfy other members of their own party who have pushed for a more ambitious — and expensive — package. Negotiations over the bill have been ongoing for months.
Lawmakers are expected to formally unveil the proposal next week, less than three weeks before the Legislature will adjourn. That will set off a sprint to determine whether Democrats can find the three-fifths majorities in each chamber to implement the package.
The bill Democrats expect to unveil looks a lot like a framework the party released earlier this year, but with some key differences. The details include:
- Raising the existing 40-cent gas tax to 55 cents per gallon — with a 10-cent increase in January 2026 and another 5-cent increase in 2028. That’s shy of the 60-cent-per-gallon plan Democrats floated earlier this session.
- Indexing the gas tax to rise with inflation.
- A new “transfer tax” equal to 2% of the price of new cars sold in the state and 1% on used cars worth more than $10,000. The earlier proposal suggested 1% on all car sales. Funding from the new tax would go toward two highway megaprojects — on Interstate 5 in Portland’s Rose Quarter and the Abernethy Bridge on Interstate 205 — and fund multimodal safety programs.
- A “road usage charge” designed to wean Oregon off the gas tax by charging drivers of electric vehicles and highly fuel efficient vehicles a fee based on miles driven. The new framework would set the per-mile rate at 5% of the state gas tax for passenger vehicles and 10% for commercial delivery vehicles.
- Increasing a tax dedicated to transit service that Oregon workers pay from their paychecks from 0.1% to 0.3%. That’s well above the 0.08% increase Democrats first proposed, but under the 0.4% increase that transit agencies have pushed for recently.
- Doubling a .05% tax on new car sales that vehicle dealers currently pay for the “privilege” of selling cars in Oregon. That money would go toward rail services and projects.
- Streamlining and simplifying the state’s weight-mile system for taxing heavy trucks and changing the state’s method of taxing diesel fuel.
What is unclear in the summary obtained by OPB is how much money the package might bring in. Democrats’ initial offering in April would have raised around $1 billion a year when implemented, but that figure did not include any revenue raised by a new per-mile charge for EVs.
Also unclear is how the proposal will be received in the Capitol. Negotiations over the transportation bill have been kept quiet in recent weeks, with a small contingent of Republican lawmakers haggling with top Democrats over the particulars.
The majority of Republicans have signaled they favor a far less tax-heavy approach. A formal proposal released by House and Senate Republicans on Thursday would redirect hundreds of millions of dollars that currently goes toward climate investments, passenger rail service and transit operations in the states. Republicans want that money to go toward nuts-and-bolts road maintenance.
A separate coalition of Democratic lawmakers, meanwhile, unveiled their own proposal earlier this week. It contained higher tax and fee increases than Democratic leaders had previously proposed.
Some lawmakers in the Capitol — including those on the Joint Transportation Reinvestment Committee that will take up the bill — were just getting their first look at the proposal on Friday.
State Rep. Shelly Boshart Davis, an Albany Republican and co-vice chair on the committee, said she’d only seen the proposal because it was submitted to a Clackamas County planning board on Thursday evening.
She called that process “outrageous and sloppy.”
An inquiry to Senate President Rob Wagner’s office, which has had a role in formulating the Democratic proposal, was not immediately returned.
This story will be updated.
