Finding consensus on a funding strategy to fix and slightly upgrade the state’s transportation infrastructure wasn’t easy. Nearly every lawmaker on the legislative transportation committee expressed concerns about aspects of the bill or the rushed, convoluted process leading up to the vote. House Bill 2025 passed out of committee on a 7-5 vote along party lines, with only Democrats in support, and now heads to the full House.
With less than 10 days left in this year’s legislative session, it’s unclear if Democrats have enough votes to pass the package in the House and the Senate — particularly after one of their members, who was removed from the committee before Friday’s vote, said he opposed the bill and will continue to do so.
The latest version of the bill would raise Oregon’s gas tax from 40 cents to 55 cents per gallon; increase most DMV fees; implement a new transfer tax on car sales; raise taxes on truck drivers; triple the state’s 0.1% payroll tax for transit; and enact a charge that electric vehicle users would pay per mile driven, among other increases.
Most of that new revenue would go to the State Highway Fund , half of which goes to the Oregon Department of Transportation for road maintenance and operations. Counties also receive about 30% of the fund for transportation-related services, and cities receive about one-fifth of the money.
Democrats on the committee all voted in favor of the bill — but only after Democratic leaders replaced one of their members on the committee, Sen. Mark Meek of Gladstone , who said he did not support the package and its many tax hikes.
“I have to admit, just fully state, that this package is fundamentally flawed for many reasons,” said Meek, who attended the committee meeting as a non-voting member. “One of the reasons is that it’s not affordable to Oregonians.”
Public transit districts statewide would benefit from the largest source of new revenue in the bill. Incrementally increasing the state’s payroll tax from 0.1 percent to 0.3 percent would raise about $450 million per year by 2031, according to a legislative revenue analysis, nearly all of which would go to transit providers.
But most of the new revenue in the bill would be directed to the State Highway Fund for road maintenance and operations. For instance, a new 1 percent transfer tax on the sale of used vehicles and a 2 percent tax on the sale of new cars would eventually raise more than $270 million a year by 2028, according to the state’s analysis.
A third major new revenue source, a 15 cent hike to the gas tax, would bring in more than $210 million to the State Highway Fund every year after 2027, the analysis said. Tying the gas tax to inflation would eventually bring in an additional $110 million annually, it said.
Several Democrats said Friday that they didn’t necessarily agree with every tax increase or provision in the bill, but they said they support allocating more money to the Oregon Department of Transportation and local governments, which have asked for more funding to better support the state’s transportation network.
“I think the fundamental framework, the building blocks that you’ve landed here, are something that the Legislature can be really proud of,” said Senate President Rob Wagner, a Democrat from Lake Oswego, who appointed himself as Meek’s replacement on the committee before Friday’s meeting.
All five Republicans voted against the bill. They said the dozens of tax and fee increases in the proposal would hurt Oregonians while not doing enough to address inefficiencies and mismanagement at the Oregon Department of Transportation , which has received significant scrutiny in the past year following multiple agency reviews that uncovered those flaws.
“I was really hopeful that we would be here today with ... a product of collaboration,” said Sen. Bruce Starr, a Republican from Dundee who spent months negotiating with Democrats on the package. “Unfortunately, that’s not where we’re at today, and for me, that’s frustrating and sad.”
Starr conceded that some technical aspects of the bill were negotiated by both parties. But he blasted many of the tax hikes, particularly the provision to eventually tie the value of the gas tax to inflation.
Although most of the new taxes would target car drivers, truckers would also pay higher taxes under the proposed bill. By 2030, truck drivers would pay an extra $140 million per year in weight-mile taxes.
The package would also raise DMV fees, increase the state’s vehicle privilege tax and implement a new road user charge that would require drivers of certain vehicles to pay per mile driven starting in 2026. That would eventually include many light electric vehicles and medium-weight electric vehicles owned by businesses.
The bill includes some provisions intended to increase oversight of the Oregon Department of Transportation , such as regular audits and more legislative monitoring of major projects. It also includes some measures to ensure that truckers and car drivers eventually both pay their fair share of taxes for their use of Oregon’s roads.
The partisan vote came as a disappointment to some Democrats who had hoped the need for more transportation funding across Oregon would incentivize some Republicans to support the package.
While Republicans said the latest version of the bill was far from a compromise, some progressive Democrats said the bill landed on middle ground because it did not include all of the tax hikes they had proposed.
“There are definitely things that I firmly believe could have been a lot better about the process,” said Sen. Khanh Pham, a Portland Democrat. “But at this moment, I just think the stakes are really high, and I don’t think Oregonians can afford to take the damage, the hurt that will cause if we kick the can down the road.”
©2025 Advance Local Media LLC. Distributed by Tribune Content Agency, LLC.
