Gov. Tina Kotek’s plan to prevent layoffs at the Oregon Department of Transportation and local governments around the state relies on a 6-cent gas tax increase, hikes to title and registration fees and doubling the payroll tax that funds transit.
Kotek laid out the basics of her plan during a press conference Wednesday, a day after announcing she would postpone planned layoffs for 45 days and call lawmakers back for a special session on Aug. 29.
“I am confident that next month, legislators are going to show up, they’re going to approve the necessary funding for the state’s transportation needs, and I truly appreciate their partnership right now to address the crisis that is facing the state when it comes to transportation,” Kotek said.
The plan she laid out on Wednesday includes:
- Increasing the state’s 40-cent gas tax to 46 cents, splitting that difference between the state transportation department and local governments. The state would receive 50% of the increase, Oregon’s 36 counties would get 30% and cities would receive 20%.
- A $42 increase to vehicle registration fees, which now range from $126 to $156 depending on a car’s age and miles per gallon.
- A $30 supplemental fee for electric vehicles, which now cost $316 to register for two years.
- A $139 increase to the state’s title fee, which now ranges from $101 to $116 for gas cars or $192 for electric vehicles.
- Doubling the current 0.1% payroll tax for transit to 0.2%.
- Committing to implementing a per-mile charge for electric vehicles and hybrids at some point in the next few years.
- Repealing references to tolling left over from a 2017 transportation package. At the time, lawmakers intended to introduce tolling to pay for improvements on roads including Interstate 205 in the Portland area, but Kotek has since declared a moratorium on tolls for everything but a replacement bridge on Interstate 5 connecting Oregon and Washington.“We are on a pause across the system on tolling outside of the interstate bridge, and I want to make that very clear in the bill,” Kotek said.
Republican legislative leaders were quick to criticize Kotek’s call for a special session on Tuesday, saying Democrats didn’t consider their counterproposals to fund the department by cutting spending elsewhere.
“Just weeks after the Legislature rejected the largest tax increase in Oregon history, the governor is calling us back to Salem to try again, this time with less notice and less transparency,” Senate Minority Leader Daniel Bonham, R-The Dalles, said in a statement. “Oregonians deserve roads that work, bridges that last and a government that puts them first, not more status quo policies and backroom deals to reward special interests.”
Kotek said she’s confident the bill has the support it needs to pass the Legislature, where bills to increase taxes require 36 representatives from the 60-member House and 18 senators in the 30-person Senate, but she’s not sure yet which Republicans will vote for it.
She disagreed with Bonham and House Republican Leader Christine Drazan that the state can cut money from elsewhere to pay for transportation needs, especially as the state braces for federal budget cuts.
“I think it would be imprudent for us to take those dollars for transportation while we have a predictable, traditional way to fund it,” Kotek said.
She also rejected Bonham’s proposal that she reduce costs by reversing her 2024 executive order requiring union labor in many state construction projects, saying that it’s a separate conversation than funding basic services.
The Aug. 29 special session comes two days after the state’s next quarterly revenue forecast, at which point lawmakers should have a clearer idea of the impact of tariffs and federal funding cuts than they did when they crafted their budget for the next two years in May and June. But Kotek said that forecast and its impacts to the state general fund is also separate from a push to pay for transportation needs.
“I do believe, and mostly because of federal budget cuts, that we will be having a general fund conversation going into the next year’s session,” she said. “But I think that is, in my mind, separate from the transportation discussion.”
By Julia Shumway of news partner Oregon Capital Chronicle
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