Oregon Legislature Passes Gas Tax, Includes Bike Tax

[Updated 7/12/2016] After a contentious but productive session, including passage of a comprehensive transportation bill, HB 2017, which will raise $5.3 billion over 10 years, the Oregon legislature adjourned July 7, three days before its deadline.

"A 4-cent gas tax hike, $16 vehicle registration fee increase and 0.1 percent payroll tax and 0.5 percent tax on new car sales will kick in next year, provided opponents don't get the question referred to the ballot or overturned in court," reports Gordon R. Friedman for The Oregonian. "Some have said they will try."

Gov. Kate Brown, who named a highway deal as one of her three biggest priorities, tweeted that she looks forward to signing it.

After the initial tax increase, the tax will be raised "2 cents per gallon every two years until 2024 for a total increase of 10 cents per gallon," reports Whitney M. Woodworth of the Statesman Journal. The state gas tax is currently 31.13 cents per gallon, last increased in 2011 by six cents per gallon.

West Virginia was the seventh state to pass a gas tax increase this year.

The nation's first bike tax

Oregon has added another "first" in terms of transportation funding, sealing the Beaver State's reputation as the nation's leader in terms of transportation user fees.

• 1919: Oregon passes first per-gallon gasoline tax.
• July 1, 2015: Oregon implements first road usage charge, aka vehicle miles traveled fee, of 1.5 cents per gallon, though limited to 5,000 volunteers.
• July 6, 2017: With passage of House Bill 2017 by the state senate, the nation will soon have the first state bicycle tax.  

Jonathan Maus, publisher and editor-in-chief of BikePortland.org, takes the news of the bike tax from here:

• It’s a $15 flat tax instead of the 4-5% tax initially proposed.
• Applies to new bicycles with a wheel diameter of 26-inches or larger and a retail price of $200 or more.
• Funds will go into the Connect Oregon program and be set aside specifically, “for the purposes of grants for bicycle and pedestrian transportation projects… that expand and improve commuter routes for nonmotorized vehicles and pedestrians, including bicycle trails, footpaths and multiuse trails.” [See ODOT].

So there you have it. We are taxing the healthiest, most inexpensive, most environmentally friendly, most efficient, and most economically sustainable form of transportation ever devised by the human species.

He has more to write on the bike tax and the bill here and here.

A variable vehicle registration fee based on fuel economy.

"Vehicle registration will be priced on a tiered system, where owners of fuel-efficient and electric cars pay more, since those cars contribute little or nothing to gas tax revenues," writes Friedman. Here's the fee schedule from the Statesman Journal:

CAR REGISTRATION FEES:  Raises the basic fee to $56 and adds sums based on miles per gallon beginning in 2020:

-- For vehicles that have a rating of 0-19 MPG, $18

-- For vehicles that have a rating of 20-39 MPG, $23.

-- For vehicles that have a rating of 40 MPG or greater, $33

-- For electric vehicles [EV fee], $110.

HB  2017 also adds a retail sales tax on motor vehicles of .5% with funds applied toward rebates of $2,500 for electric vehicles [EVs] and  $1,500  for hybrid vehicles. It adds a .10 percent payroll tax to fund public transit statewide.

Supermajority threshold

Like some other states, tax increases need to pass by a supermajority in Oregon. According to the bill's overview, it provides "for revenue raising that requires approval by a three-fifths [60%] majority," though less onerous than California's two-thirds majority.

"With the political splits right now that requires one GOP vote in each chamber," emailed Frieman. However, the bill received bipartisan approval in both chambers, exceeding the required threshold [65% in House and 73% in Senate] unlike the partisan legislative vote on April 6 in California for SB 1 that squeaked by without a vote to spare.