By MIA MALDONADO/Oregon Capital Chronicle
SALEM — Rural and urban transportation workers pleaded with the Oregon Legislature’s Joint Transportation Committee to pass a massive funding package that Democrats say would solve the Oregon Department of Transportation’s budget shortfalls and stabilize the state’s deteriorating road infrastructure.
In a three-hour hearing on House Bill 2025 Thursday evening — the last of four hearings for the much anticipated transportation package published Monday — workers shared stories about responding to floods, wildfires, fatal accidents and suicide attempts without adequate staff and resources.
“We are operating on a skeleton crew at best,” Bend-based transportation worker Justin Iverson told the committee. “We have been dwindling down over the last 10 years, to the point that we can barely maintain the roads now.”
During the wintertime, when ice and snow pile up on roads, Iverson said just four to five people cover a 300-mile area in Central Oregon.
“We are the first, and oftentimes the only, people to respond during the wintertime,” he told lawmakers. “The public relies on us to be there. We need to be there for them, so we ask that you fund this so that we can continue serving our communities.”
A vote on House Bill 2025 has not yet been scheduled.
Money for basics
House Bill 2025 would increase ODOT revenue by creating dozens of new fees and taxes, including a 15-cent raise to the state gas tax over the next three years and almost tripling registration fees for passenger vehicles.
State officials estimate they need to raise $1.8 billion each year to pay for transportation services across the state. About $205 million of that is needed just to keep road maintenance funding at its current level. The transportation department said it will run out of money needed for state highway maintenance after mid-2025. Without an increase in funding for this work, ODOT would have to lay off up to 1,000 workers, the Oregonian reported.
Revenue from the bill would also fund infrastructure projects such as the Interstate 5 Rose Quarter Improvement Project in Portland’s Albina neighborhood, upgrading the Abernethy Bridge and widening Interstate 205 in the Portland metro, improving the Newberg-Dundee bypass in Yamhill County, and upgrading a Salem bridge off Center Street and State Highway 22 to make it strong enough to endure earthquakes.
Oregonians from around the state, as well as city and county officials — including the mayors of Bend, Portland, Beaverton and rural Oakridge and Toledo — also spoke in favor of the bill. However, Republican lawmakers and some Oregonians who testified against the bill said low- and middle-income drivers would bear the brunt of new taxes and transportation fee spikes.
Opposition to tax increases
Some drove hundreds of miles to give testimony Thursday, or tuned in virtually, to oppose the bill. They cited existing financial strain from inflation, high housing costs and rising utility bills.
Amy Reiner, a resident from Clackamas County, spoke in opposition to the bill, saying she believes the new taxes and fees would financially strain Oregon families — particularly low- and middle-income ones.
“People are already leaving Oregon,” she said. “We shouldn’t be creating policies that make Oregon harder to live in. We should be focused on making it affordable and inclusive.”
Greg Remensperger, the executive vice president of the Oregon Auto Dealers Association, opposed the transfer tax portion of the bill, or a tax on used and new sold cars. He said it would burden car purchasers already dealing with a car loan at a time when those loan delinquencies are at a record high.
“Let’s be honest, a 2% transfer tax really needs to be termed what it is,” he told the committee. “It’s a sales tax. Oregon residents have fought down sales taxes on multiple occasions, and they will object to this too.”
Several Republicans, including state House Minority Leader Christine Drazan, R-Canby, and Rep. Shelly Boshart Davis, R-Albany, have criticized the bill, saying it was crafted by Democrats behind closed doors and rushed, without having a financial analysis prepared showing how much revenue it would raise.
Bill sponsor Sen. Chris Gorsek, D-Troutdale, said during an informational hearing on Monday that he thinks the bill would generate at least $1 billion in revenue.
“The public is being asked to testify without knowing what the bill will actually cost them,” Drazan said on Thursday. “That is unacceptable.”
Republicans on Monday introduced an alternative transportation package, House Bill 3982, which avoids taxes and instead redirects funding from climate initiatives, public transit and passenger rail services, bicycle programs and payroll tax allocations. The bill does not yet have a scheduled hearing in either chamber of the Legislature.
Some of the new fees and tax changes House Bill 2025 would implement include:
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- A gas tax increase from $0.40 to $0.55 per gallon, starting with a 10-cent increase in January 2026 and additional 5-cent increase in 2028. Diesel would also be taxed at the same rate as regular gasoline.
- Vehicle registration fees would rise from $43 to $113 for passenger vehicles; $44 to $110 for mopeds and motorcycles; $63 to $129 for low-speed vehicles; and $63 to $129 for medium-speed electric vehicles.
- Title fees would increase from $77 to $182 for new titles, and from $27 to $44 for salvage titles.
- A new transfer tax on cars 10,000 pounds or less, and sold for more than $10,000, would be taxed at 2% if new, or 1% if used.
- Increased payroll tax for transit from 0.1% to 0.18% starting in 2026, then increased to 0.25% in 2028 and 0.3% in 2030.
- Increased privilege tax and commensurate use tax from 0.5% to 1% percent of the sales price of a vehicle. A privilege tax is a tax for the privilege of selling vehicles in Oregon, and the use tax applies to vehicles purchased from dealers outside of Oregon that are required to be registered and titled in Oregon.
- A new $340 yearly fee for electric vehicle drivers to participate in the Road Usage Charge Program.
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