From Gas Tank to Paycheck: Oregon’s Plan to Tax Everything That Moves (HB2505)

Portland, Ore. — Cascade Policy Institute submitted a 30-page special report for testimony, Monday, on the massive 12-tax transportation package HB2025 heading into its final hearing Thursday (6/12) at 4:00 PM with the Joint House-Senate Transportation Reinvestment Committee.

The report is titled “From Gas Tank to Paycheck: Oregon’s Plan to Tax Everything That Moves,” by Eric Fruits, Ph.D., and charts in detail the long list of proposed increases in taxes, fees, and charges and what they will they cost the average Oregonian.

Fruits outlines three major transportation funding proposals circulating in the Oregon Legislature: TRIP 2025, the SMART Framework, and HB 2025 which would impose the largest tax increases in Oregon’s history through twelve new or expanded taxes and fees (as shown in Table 1 below). Each package would generate approximately $1.5-2 billion in new revenue every two years.

The average guy loading his tools in his truck to work in his trade, and the average mom running a small business or going to the office, then stopping for groceries and carting the kids to soccer practice, are going to see hundreds of dollars of increases coming from every possible direction, many of those dollars going to fund projects unrelated to transportation and for which they will never see a benefit–such as gas tax dollars going to rail transit or salmon habitat restoration. This “Weak User-Pay Principle”as the report details, breaks the traditional link between who pays and who benefits.

While the bill is being heavily negotiated and amendments are being proposed, it’s important for Oregonians to comprehend the combined impact of these taxes on every taxpayer and hold their legislators accountable. Table 1 of the full report lists just six of the major tax and fee increases with a potential to add a minimum of approximately $762 in tax and fee increases to the low-mileage, low-wage, driver of a used car–and that doesn’t include the inflationary impact of a 16.9% trucking industry tax on goods and services, or increased DMV fees, transfer taxes, privilege taxes, and road use charges.

The proposals include significant new costs for Oregon families and businesses (Table 1):

• Gas Tax Increase: Would increase from 40 cents to 55-80 cents per gallon by 2032, costing the average driver $60-160 more annually.
• Vehicle Fee Increases: Registration fees would increase by $50-66 per two-year period, while title fees would rise by $70-90 per purchase.
• New Vehicle Sales Tax: A new 1-2% tax on vehicle purchases, adding $327-1,199 to typical car purchases.
• Payroll Tax Increase: The transit payroll tax rate would double to quintuple, costing workers $20-101 annually, despite less than 10% of Oregonians using public transit.
• New Road Usage Charges: Electric and fuel-efficient vehicles would pay new per-mile fees, potentially costing $235-324 annually.
• Weight-Mile Tax Increase: Commercial trucking would face 16.9% higher weight-mile taxes, while delivery companies would pay new fleet charges.

• Read the full testimony at OLIS or from CascadePolicy.org here.Cascade Policy Institute, in partnership with the Oregon Capitol Watch Foundation, commissioned this special report by Eric Fruits, Ph.D., of Economics International.

Eric Fruits, Ph.D. is an adjunct scholar at Cascade Policy Institute. As a consulting economist, he has produced numerous research studies involving economic analysis, financial modeling, and statistical analysis.