Gov. Tina Kotek is tweaking a proposal to raise billions in taxes for roads and bridge upkeep, a little more than a week before the bill’s fate is tested in a special legislative session.

In a revamped proposal released Wednesday, Kotek offered a concession to environmental groups, which worried that a plan to slap a new tax on electric delivery vehicles could convince companies not to buy them. That tax is now out.

And Kotek offered a boon to trucking interests, who have long argued for changes in the way they are taxed under Oregon law. Adjustments in the bill have won the support of the state’s trucking lobby.

Meanwhile, the major question of what Kotek’s proposal might cost Oregonians is coming into focus.

Earlier this week, legislative staffers produced a revenue analysis that showed an earlier version of Kotek’s bill would raise $5.7 billion over the next decade. Changes included in the new draft the governor’s office released Wednesday would alter that picture, but likely not by much.

If the numbers remain relatively similar, Kotek’s bill would be nearly half as large as the transportation funding bill Democrats put forward in this year’s legislative session. That bill failed on June 27, the session’s final day, partly because of concerns its $11.7 billion price tag was too high.

Kotek’s bill will get its first test on Monday, when lawmakers hold a public hearing to hear from Oregonians and special interest groups that are closely watching the issue. Among other things, the governor’s bill will:

• Raise the state’s 40-cent-per-gallon gas tax to 46 cents beginning in January. That change is expected to raise around $90 million per year.
• Hike vehicle title and registration fees Oregon motorists pay. Registration fees would increase by $42 and titling fees by $139. Electric vehicles, which do not pay gas taxes, would be required to pay an additional $30 on top of existing fees.
• Double the payroll tax that currently takes 0.1% out of workers’ paychecks to support public transit. The tax, created in 2017, sent roughly $130 million to various Oregon transit agencies last fiscal year.
• Require drivers of electric vehicles and hybrids to enroll in the state’s OReGo program, which charges drivers for miles driven. Such a shift is considered necessary for funding road projects as EVs continue to gain popularity and gas tax revenue is expected to decline.
• Require more frequent auditing of the Oregon Department of Transportation so lawmakers have better insight into the progress and cost of major road projects. Those accountability measures are a response to backlash over huge cost increases of ODOT projects.
• Eliminate existing statutory language requiring tolling for some highway projects. That language has caused heartburn for some lawmakers, even though Kotek paused tolling plans last year.

Kotek and top Democrats are acting with urgency to pass a funding bill, saying the consequences of inaction are too great.

Without an additional $354 million in its current two-year budget, the Oregon Department of Transportation says it will have to lay off roughly 10% of its employees, slash services, and close 12 maintenance stations around the state.

Notably, the revenue analysis on the first draft of Kotek’s bill shows only about $290 million in new money for ODOT in the current budget, less than the agency says it needs to stave off layoffs. It’s unclear if that picture will change in light of the changes introduced Wednesday.

What is clear is that Kotek has won goodwill from some groups with the changes.

The Oregon Trucking Association is now supportive of the bill, after additions that simplify the state’s byzantine taxing system for heavy trucks, and change the way diesel fuel taxes are administered. The group didn’t back the first draft of Kotek’s plan.

“We have been living under an antiquated taxing system,” Jana Jarvis, president and CEO of the OTA, said Wednesday. The changes lawmakers are considering will “reduce administrative costs, and it’s more in line with how other states operate,” she said.

Kotek has also faced pushback from environmental groups over plans to require electric vehicle drivers to pay for every mile they drive. They’ve pressed the state to lower the planned per-mile charge for EVs. And they argued that a plan to tax electric delivery vehicles would simply lead to more diesel trucks on the road, as companies declined to buy EVs.

The governor agreed on one of those points, scrapping a plan to tax commercial EVs.

OPB’S Bryce Dole contributed reporting

News Source : https://www.opb.org/article/2025/08/20/tina-kotek-oregon-transportation-funding-bill-special-session/