Update on HB 2025: Oregon’s Transportation Reinvestment Package
The Oregon Legislature is currently considering House Bill 2025, a $5.1 billion proposal to address critical transportation needs across the state. The Washington County Chamber of Commerce has been actively tracking the bill and recently submitted testimony to the Joint Committee on Transportation Reinvestment.
This legislation introduces new infrastructure funding mechanisms, expands oversight of the Oregon Department of Transportation (ODOT), and prioritizes key capital projects—all with long-term implications for Oregon’s economy and business climate.
Key Provisions in HB 2025
Increased Accountability and Oversight
- Requires biennial audits of the State Highway Fund and annual audits of ODOT capital projects.
- Establishes a restructured Continuous Improvement Advisory Committee with subject matter experts and quarterly reporting requirements.
- Transfers authority to appoint the ODOT Director to the Governor, subject to Senate confirmation.
- Expands legislative oversight of major project changes and cost overruns.
Revenue Generation through Taxes and Fees
- Fuel Tax: Increases from 40 cents to 55 cents per gallon by 2028, followed by inflation-based indexing every two years.
- Transit Payroll Tax: Triples from 0.1% to 0.3%, with revenue dedicated to public transportation services.
- Vehicle Privilege and Use Taxes: Applies a 2% tax on new vehicles and a 1% tax on used vehicles over $10,000; includes a 1% use tax for out-of-state vehicle purchases.
- Registration and Title Fees: Phased-in increases beginning January 2026; base registration rises from $43 to $113, title fees from $101 to $171.
- Weight-Mile Tax: Incremental rate increases for heavy trucks through 2034.
- Road Usage Charges (RUC):
- Required for electric and plug-in hybrid passenger vehicles beginning July 1, 2026.
- Includes a per-mile fee option or a flat annual fee, starting at $340 in 2026.
- Also applies to commercial delivery fleets between 8,000 and 26,000 pounds.
Identified Projects and Investments
- Prioritizes funding for:
- I-5 Rose Quarter
- Abernethy Bridge
- I-205 Widening
- Newberg–Dundee Bypass
- Highway 22 / Center Street Bridge in Salem
- Maintains the 50/30/20 funding formula: 50% to the state, 30% to counties, and 20% to cities.
- Invests in Safe Routes to Schools, wildlife corridor mitigation, and the Great Streets program.
The Chamber’s Position
The Washington County Chamber supports the Legislature’s goal of improving Oregon’s transportation infrastructure. However, we urge lawmakers to advance a plan that balances accountability with economic feasibility.
Supported Provisions
- Increased and indexed gas tax to provide sustainable funding.
- Road Usage Charges for electric passenger vehicles to modernize funding and ensure fairness.
- Robust oversight measures to restore confidence in ODOT’s performance.
- Preservation of the 50/30/20 revenue-sharing formula, ensuring local road maintenance is adequately supported.
Provisions We Cannot Support at This Time
- Increasing the state transit payroll tax to 0.3%, which would place additional strain on employers.
- Applying Road Usage Charges to commercial delivery fleets, which already contribute through fuel taxes and regulatory compliance.
- Expanding privilege and use taxes on vehicle purchases, which may disproportionately affect consumers and small businesses.
Moving Forward
We respectfully recommend a back-to-basics approach. In the face of economic uncertainty, it is critical that Oregon avoids overburdening taxpayers and job creators. Strategic investments must be paired with fiscal restraint and practical implementation timelines.
The Chamber will continue to advocate for a transportation package that addresses infrastructure needs while protecting the economic health of our business community.
For questions or to learn more about our public policy and advocacy engagement, contact Jen Little, Vice President of Public Affairs, at JenL@wcchamber.org.