Oregon's High-Stakes Transportation Debate

It’s a big transportation year in the Oregon state legislature, and the stakes are high for cities and towns.

With revenue from gas taxes dwindling around the country, the cost of road construction and maintenance on the rise and lingering financial issues at public transit systems stemming from the COVID-19 pandemic, states like Oregon are looking for new sources of funding for transportation. The last time the legislature passed a comprehensive transportation bill was 2017. That package has sent more than $5 billion to transportation projects around the state, with funding for state highway widenings, electric bus charging infrastructure, and new trails and bike paths. It was funded with increased motor vehicle fees and higher gas taxes, alongside a new 0.1 percent payroll tax to support public transit and a $15 excise tax on bicycles. Most of the money, around 90 percent of it, has been dedicated for new projects.

This April, Oregon Democrats, who have controlled all three branches of state government since 2013, released a framework for a new transportation bill. Like the previous package, it proposes to raise funding from a variety of fees and taxes — most significantly, an increase in the state gas tax from 40 cents a gallon to 60 cents a gallon by 2032. The proposal also calls for higher vehicle registration fees, an excise tax on vehicle sales, and enrolling all electric vehicles in a program called OReGO that charges drivers a per-mile fee in lieu of gas taxes. OReGO was the first road user charge in the country.

Unlike the 2017 bill, the Democrats’ proposal this year would invest much more in repair than new capital investment. The taxes and fees outlined in the April proposal would raise an estimated $1.9 billion, with 90 percent of the funding being dedicated to operations and maintenance. Some stakeholders say that would mark a welcome shift. The portion of Oregon roads in “good condition” is at its lowest point in more than two decades, according to the Oregon Department of Transportation (ODOT).

“We don’t need to be spending money on fancy new stuff and things of that nature. We need to be spending more money on the maintenance side,” says Jim McCauley, legislative director for the League of Oregon Cities.

McCauley says the priority for cities is getting the most funding possible from a state transportation bill, with more funding dedicated to local projects. The typical split in state transportation spending has been 50 percent for ODOT projects, 30 percent for counties, and 20 percent for cities, even as cities control three quarters of road mileage in the state. The state transportation package is also coming at a time when the federal government appears to be pulling back from grant programs that provided funding directly to cities. Local governments in Oregon can pass their own gas taxes, but they are not widespread: Only 22 out of 241 cities have adopted a local gas tax, McCauley says.

“Our tax structure in this state is pretty damn limiting,” he says. “We are very dependent upon what the state is able to do with the transportation package.”

Despite having just enough seats to pass a transportation package on a straight party line, state Democrats are working with Republicans on the details of the transportation bill. That’s in keeping with previous years, when transportation funding packages were passed with bipartisan support. But the prospects for a bipartisan package aligned with the Democrats’ framework are uncertain. One Republican state representative who serves on transportation committees in the state house initially called the tax increases in the Democrats’ proposal “egregious.” Republicans’ alternate proposal called for big cuts to transit funding and cycling projects, rather than tax increases. Legislators have been tight-lipped as they try to move a package toward committee hearings.

“The goal is bipartisanship,” says state Rep. Susan McLain, a Democrat who co-authored the framework, and who cites street safety as a priority for an eventual funding deal. “This is hard work and it takes some time, effort, energy and concentration.”

“It’s a bipartisan effort historically,” says state Sen. Bruce Starr, a Republican who’s been involved in negotiations. Starr resumed office this year after an initial stint in the state legislature between 1999 and 2015. “Potholes don’t discriminate based on partisan registration.”

Lawmakers say they’re committed to getting a transportation package passed this year, though time is running out. The session ends at the end of June.

While lawmakers debate the specifics of the bill, they can refer to thousands of points of input from residents, local leaders, and advocacy groups. The legislature’s joint committee on transportation carried out a listening tour last year to hear about infrastructure and mobility priorities around the state. Move Oregon Forward, a coalition of transportation, climate and environmental groups, published an analysis of testimony given to the committee last year. It found that the priorities named most frequently by witnesses were expanding support for public transit and active transportation, and reducing investments in widening highways.

“This is about reinvesting in the things that are going to keep the cost of living down and improve people’s access to opportunity,” says Indi Namkoong, an advocate with Verde, an environmental justice group based in Northeast Portland. The neighborhood where Verde is based has been dealing for years with air quality issues related to diesel engine traffic, along with a shortage of basic neighborhood infrastructure like sidewalks. Other parts of the state have different issues, including badly maintained local roads or infrequently plowed mountainous areas. About 30 percent of Oregonians don’t drive at all, whether because of “age, ability, income or choice,” Namkoong says. For too long, the state has overinvested in roads and highways and underinvested in alternate mobility infrastructure, Namkoong says.

“What we’re seeing and hearing from communities is that that has come at the expense of money and resources and attention to taking care of the things we already have, and that is harming every Oregon community, whether they’re losing people in traffic crashes or suffering health impacts or just paying a lot more to maintain their car,” Namkoong says. “It’s a big project to find our way out of it, but we think doing it is part of that essential investment in our future — taking care of what we have and giving people more choices that are going to serve them for the next century.”