Transportation budget math sometimes feels like a car running off the road. Road maintenance in Oregon is funded mostly by a gas tax. Costs for labor and asphalt have been rising, but the gas tax is usually stuck in park and doesn’t rise with inflation. Lawmakers last voted in 2017 to increase it, and it’s been 40 cents a gallon since January 2024. But lawmakers in 2017 didn’t predict COVID-era price spikes. And cars are now using less gas as they become more fuel efficient — or even no gas when it comes to Oregon’s 100,000 registered electric vehicles.
Leaders of the Oregon Legislature know all that, and that’s why they declared transportation funding a priority in the 2025 legislative session. But there are less than two weeks left in the session, and the vehicle to address the shortfall, HB 2025, still hasn’t had its first vote. Meanwhile, opponents are already mobilizing to kill it.
HB 2025 aims to raise revenue and stabilize transportation funding. It would:
- increase the gas tax by 10 cents a gallon Jan. 1, 2026, 5 cents two years after that, and afterward index it to inflation;
- levy a road usage charge on vehicles that don’t use gas, based on miles driven;
- levy a road usage charge on commercial delivery vehicle fleets like the one operated by Amazon;
- increase title fees $70 and vehicle registration fees $50;
- add a vehicle transfer tax of 2% on new vehicle sales and 1% on used vehicles;
- phase in an increase to the payroll tax that funds mass transit over a six-year period— to 0.3%, up from 0.1%;
- increase but also simplify the weight-mile tax on over-the-road trucks.
In theory, Oregon Democrats have the three-fifths supermajority they need to increase revenue without Republican support. But they may need at one Republican in the House after all, because State Rep Hoa Nguyen (D-Powell Butte) has been battling stage 4 cancer and has been too sick to attend legislative sessions. Transportation funding has traditionally had bipartisan support, and the 2017 transportation funding package had the support of about half of the Republican caucus. But this year, some Republicans are digging in to oppose it.
On June 4, State Senator Brian Boquist (R-Dallas) filed papers to form a political action committee called “No Gas Hikes” that aims to gather signatures to refer the bill to voters in hopes of defeating it. Within a week, the committee was reporting $185,000 in contributions from car dealers who are in a fury over the vehicle transfer tax.
Some of Oregon’s biggest unions represent members who have a direct stake in the outcome, and they’ve been testifying in support of the bill. AFSCME represents employees in city and county transportation departments. Laborers represents many workers employed by highway contractors. Amalgamated Transit Union Local 757 represents transit employees. And SEIU Local 503 represents workers at the Oregon Department of Transportation (ODOT) and its Department of Motor Vehicles (DMV) division — about 2,500 workers in all.
ODOT workers pave and re-stripe roads, fill potholes and fix guard rails, plow snow, and respond quickly to traffic incidents so vehicles can get moving again. And they may be the first to suffer layoffs if the bill fails to pass.
In August 2024, as part of a normal budget exercise, ODOT calculated what would happen without additional funding. The resulting budget forecast listed about 1,100 positions at ODOT that would would have to be cut —at an agency with fewer than 5,000 staff.
“That was the first step, where we saw from the union side how serious it was,” said transportation analyst Jason Lawrence, vice president of the SEIU sublocal 730 at ODOT. “You see the list of positions, and people are going and looking at the list and going, ‘hey, that’s my job!’”
Mindful of the budget uncertainty, ODOT has left about 300 positions unfilled as vacancies occurred, but if HB 2025 doesn’t pass, about 700 ODOT workers would be laid off, including about 350 workers represented by Local 503. ODOT would also close 17 maintenance stations across the state.
Politics around transportation have lately been somewhat strained. Lawrence says that’s because lawmakers punted in 2017 when they passed HB 2017, that year’s transportation package. They didn’t fully fund it, and they didn’t predict the COVID spike in inflation, so they ended up promising projects that haven’t yet been delivered. HB 2017 teed up big projects like I-5 Rose Quarter widening and the Newberg-Dundee bypass, but part of the funding was slated to come from tolling, with the details to be explored by ODOT. That never moved forward, because the idea of tolling became politically toxic, with even Democratic legislators pledging to voters that they would oppose tolls.
“It isn’t like all of a sudden there were accounting errors and ODOT is short of money,” Lawrence told the Labor Press. “It’s been a lack of vision and leadership for a long time in Salem.”
HB 2025 is meant to include additional funding to bring projects that were green-lighted in 2017 to the finish line, including I-5 widening in Portland’s Rose Quarter, widening and upgrading the Abernethy Bridge on I-205, a seismic retrofit of the Center Street Bridge over the Willamette River in Salem, and the Newberg-Dundee bypass.
As the legislative session nears its constitutionally mandated June 29 end, the wrangle will be about how to pay for it.
“People are talking a lot about taxes,” says SEIU Local 503 political director Courtney Graham, who’s been working all session on the bill. “What feels like it’s getting lost is that this is really critical work. We all rely on it, whether you realize it or not. Our state relies on having smooth and safe transportation.”
STATE GAS TAXES
- Oregon 40 cents a gallon
- Washington 53 cents a gallon
- California 69.8 cents a gallon
- Idaho 33 cents a gallon
