DALLAS – Oregon is on the path to tolling its interstate highways with the passage of a 10-year, $5.3 billion transportation package in the final days of the legislative session.

Oregon’s new $5.3 billion road funding bill authorizes up to $480 million of highway revenue bonds for transportation projects.
Oregon’s new $5.3 billion road funding bill authorizes up to $480 million of highway revenue bonds for transportation projects.
Oregon DOT

The final bill is the skinny version of an $8 billion plan unveiled in June by the Legislature’s Joint Committee on Transportation Preservation and Modernization. A similar bill was proposed in the 2015 legislative session but never came to a vote.

The compromise bill was approved by the state House on July 5 and by the Senate a day later by the three-fifths majorities needed to pass a tax increase. Gov. Kate Brown said in a Tweet after the Senate vote that she was “proud and grateful of all those who worked tirelessly on the transportation package. I look forward to signing this critical bill.”

The measure, House Bill 2017, directs the state transportation commission to ask the Federal Highway Administration by the end of 2018 for permission to toll Interstate 205 and I-5 from the border with Washington to a point southwest of Portland. Tolling existing interstates, which receive federal funding, is currently prohibited.

The toll revenue would be dedicated to funding of congestion relief projects. The bill directs the commission to “implement value pricing to reduce traffic congestion” and to work with Washington state officials to establish and operate tolls at the state line.

Value pricing could include adding high occupancy tolling lanes to the highways or converting existing free lanes to tolled ones with higher charges during peak hours, said Travis Brouwer, assistant director of the Oregon Department of Transportation.

The measure funds the 10-year plan with up to $480 million of state revenue bonds and by raising the state gasoline tax by 10 cents in phases over six years. The legislative panel’s original proposal called for a 12 cent per gallon increase in the fuel tax.

Sen. Lee Beyer, a Democrat from Springfield and co-chairman of the special transportation panel that developed the plan, called HB 2017 a "truly a remarkable piece of work" that will benefit every corner of the state.

"This is probably the most comprehensive transportation bill that the Oregon legislature has ever passed," Beyer said.

“Oregon’s rural transportation system is crumbling and outdated while cities are clogged with congestion,” said Sen. Brian Boquist, a Republican from Dallas who was the panel’s other co-chair.

The state gasoline tax of 30 cents per gallon will go up by 4 cents in January 2018. The tax rate will then go up by 2 cents every two years before a final increase to 40 cents per gallon in January 2024.

Revenues from the higher gas tax are expected to total $1.3 billion over the next 10 years.

Transit projects across the state will be eligible for funding from a new 0.1% statewide employee payroll tax that is expected to generate $1.2 billion over 10 years, but the legislation specifies that none of these revenues can be used for light rail.

The state vehicle registration fee will go up in 2018 by $56 per year, with additional charges beginning in 2020 based on the gas mileage. Fuel-efficient vehicles will pay a higher annual fee.

Owners of electric vehicles will have to pay an additional registration fee of $110 per year. However, purchasers of electric vehicles will receive a $2,500 rebate, with a $1,500 rebate for hybrid vehicles.

Rep. Knute Buehler, a Republican from Bend, was one of 20 House members who voted against the transportation bill. He cited the rebate program as the basis of his opposition.

“I believe Oregon is long overdue to improve our transportation infrastructure but this plan is the wrong way to do it,” Buehler said. "I'm strongly opposed to a new 'Tesla Tax' to subsidize the purchase of electric cars for a privileged few."

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