Transportation Funding Bill

After over two years of planning, negotiating, and compromise, the Oregon State legislature has finally passed a transportation bill that will provide funding for needed repairs and upgrades to Oregon’s highway infrastructure and statewide expansion of transit.

Earlier Funding Proposal Lacked Bipartisan Support

In June 2015, Oregon lawmakers revealed a transportation package that would have given new funding each year of $205 million for state and local roads and seismic upgrades to earthquake-vulnerable bridges. Also included in the package was funding for mass transit (not light rail) and bicycle and pedestrian paths.

Funding would have been provided through increased taxes and fees, with a 4-cent per gallon increase in the gas tax, flat fees for new vehicle registration, driver license, and vehicle registration, and a new income tax for transit projects that would have been placed on people who work in Portland and Eugene transit districts.

Oregonians may have accepted increases in taxes and fees for needed highway infrastructure repairs and upgrades, but Republican lawmakers refused to consider a transportation plan that would not repeal the Clean Fuels Bill that Governor Kate Brown had signed into law in March 2015. Environmental groups were unhappy that the carbon reduction plan developed over seven years would be replaced with one written by the Western States Petroleum Association. The transportation package failed to get bipartisan support, and the Clean Fuels Bill remained intact.

Oregon Lawmakers Try Again with a New Transportation Funding Bill

After a year of visioning and public hearings, in February 2017 a House and Senate panel revealed a new transportation funding package that would provide $5 billion a year for transportation work, to fund roads, bridges, and public transit, without listing specific projects that would be funded. The work could be paid for by gas tax hike, highway tolls, or lottery revenue.

In May 2017, the panel presented an $8 billion transportation package with more details to Oregon legislators and the public, with funding coming in over the next decade from increased taxes and fees. Added to a .06 percent higher gas tax, to increase another .02 every other year through 2026, were higher registration fees on vehicles with higher-than-average fuel efficiency, because those drivers pay less in fuel taxes than other drivers. There would also be taxes on new and used car sales and bicycles, a state-wide payroll tax increase of 0.1 percent starting in 2018, and tolls on portions of Interstate 5.

The bulk of the funding would go toward reducing highway congestion on Interstate 5, Interstate 205, and Oregon 217. Remaining money would fund mass transit (but not light rail), bicycle and pedestrian paths, and needed seismic upgrades to bridges. Added to the package was an unexpected requirement that large cities salt at least 25 percent of their roads if more than 2 inches of snow falls over a 12-hour period.

Metro-Area Mayors Push Negotiations to Pass the Bill

After two dozen metro-area mayors issued a statement calling on lawmakers to act, lawmakers reached out to negotiate with interest groups with amendments to the bill, while not limiting the size of the transportation package. Petroleum sellers disliked a gas tax hike, AAA and auto dealers disapproved of a tax on car sales, and cyclists opposed a tax on bikes. At the same time, Republicans demanded to modify the state Clean Fuels Law to cap its costs, while Democrats would not allow a bill modifying the fuels law to move forward.

Finally in July 2017, Republicans and Democrats reached an agreement when the GOP won a provision to ensure the law would not have an adverse impact on gas prices, while reducing greenhouse gas emissions from vehicles. Rebates for sales of electric vehicles was also added to the package.

Details of the New Transportation Funding Bill

The Transportation Funding Bill will provide broad-based improvements in Oregon’s roads, bridges, ports, and transit system, with more transportation options. Money will be allocated to bicycle and pedestrian paths, Safe Routes to School, and Bike/pedestrian projects.

Funds for the improvements will be provided by:

  • Fuel tax increase of .10 per gallon (to scale up over the next eight years)
  • Average increase in vehicle registration fees of $13 per vehicle
  • Average increase in vehicle titling fees of $18 per vehicle
  • .5 percent excise tax on the sale of motor vehicles
  • $15 flat fee on new bicycles that retail for $200 or more and have a wheel size that is 26 inches or greater

The Transportation Funding Bill, reduced to $5.3 billion, passed both the House and Senate to be signed into law by Governor Kate Brown.

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