EDITOR’S NOTE: There’s been so much rhetoric about the state of Oregon’s ODOT funding bill. Civic leader, writer, storyteller, rural community leader LaNicia Duke is taking a deep dive into the ODOT funding bill and more in her new series “Dear Oregon”.
By LaNicia Duke
On Monday, September 1st, state representative Christine Drazan posted a video saying through HB 3991, house democrats are imposing the largest transportation tax hike in Oregon history. She also stated the payroll tax for Oregonians will double. I decided to do some research on my own of Oregon Department of Transportation (ODOT) to see what’s being proposed in the new bill along with historical data from 2003, 2009, and 2017, the previous major transportation bills passed in the legislature.
ODOT is specifically responsible for administering programs related to Oregon’s highways, roads, bridges, railways, public transportation services, transportation safety, drive and vehicle licensing, and climate and motor carrier regulations. Oregon pays for the construction, maintenance, and operation of the state highway system primarily through user fees. Oregon instituted its first source of revenue stream for ODOT in 1905 implementing a $5 vehicle registration fee. Oregon imposed the nation’s first gas tax in 1919 at one cent per gallon.
Per the state constitution: Oregon’s State Highway Fund collects resources from three main sources: Taxes on motor fuels, including gas tax and diesel tax, Taxes on heavy trucks, including the weight mile tax and truck registrations, and Driver and vehicle fees, including licenses and vehicle title and registration. ODOT also receives revenue from other state sources, including: 0.1 percent Statewide Transit Tax, 0.5 percent vehicle dealer privilege tax, $15 tax on sale of new bicycles with tires over 26 inches costing at least $200, 2.3 cents from cigarette tax and custom license plate fees. These revenue sources are not bound by the constitution but they do serve funding programs not directly related to highways. In 2009, the state representative passed HB 2001 allocating funds: 50% to state, 30% to counties and 20% to states.
The federal government provides revenues from federal fuels taxes and heavy truck taxes by funding formulas. Oregon receives about $700 million in funding from the Federal Highway Administration each year for construction projects on the state’s roads, including the interstate, as well as planning and engineering. Federal dollars cannot be used for day-to-day maintenance services or ODOT operations; federal funds can only be spent on capital construction projects. Some funds can also be used for transit and bicycle/pedestrian capital projects. About 30 percent of these funds go to local governments. Oregon also receives about $150 million in public transportation funding from the Federal Transit Administration each year.
To Representative Drazan’s first claim of this being the “largest transportation hike in history” is NOT true. HB 2017 raised $5.3 billion over ten years or $530 million per year for 10 years. The new legislation proposes to raise an additional $4.3 billion over 10 years or $430 million over 10 years. This is a 19% decrease from HB 2017. The current legislation in the 2025 special session proposes:
- Gas tax increase: from 40¢ → 46¢/gallon
- Vehicle registration fees: + $42: Electric Vehicle fees: + $30 (they don’t pay gas tax)
- Title fees: raised from + $132.
- Statewide Transit Tax: raised from 0.1% → 0.2 percent from 2026-2028
- Mandatory per-mile road usage charge (with optional annual flat fee) for EVs/hybrids.
- Weight-mile tax formula revised for trucks.
- Diesel is taxed the same as gasoline
- More frequent audits of ODOT
- Eliminate existing statutory language requiring tolling for some highway projects
The budget Governor Kotek was advocating for in the regular session may have proven the allegation true.
Senate Bill 5411 appropriated (already approved) $6.129 billion for the 2025-2027 biennium. The 2023-25 Legislatively Approved Budget for ODOT was $6.33 billion. The budget is a 3.2% decrease of $201 million. The reason for the urgency of the special session isn’t just looking at revenue for the next decade, but an immediate $300 million for the current biennium.
In my next article I’ll take a deep dive into what ODOT funds.
Seasoned with love!