New taxes on cars, bikes, payroll and gasoline to fund $5.3B Oregon transportation package

SALEM, Ore. (AP) — A $5.3 billion plan to modernize Oregon's transportation and public transit systems over the next decade has passed the Oregon Legislature with bipartisan support after a final 22-7 vote in the state Senate on Thursday.

House Bill 2017 now heads to Gov. Kate Brown's desk for signing. It addresses five broad areas of concern throughout the state: traffic congestion, alternate roadway options, ongoing investments for maintenance, safety of existing infrastructure and accountability over public spending.

To pay for those projects, the bill increases gas taxes and vehicle title and registration fees and creates new taxes on employees' paychecks and automobile sales, a surcharge on bicycle sales as well as highway tolls in metro Portland. It also establishes a $12 million annual rebate program for those who buy eco-friendly cars.

HB 2017 was the culmination of almost two years-worth of research, negotiations, public hearings and community tours, and its passage is considered a major accomplishment for Democrats, Republicans and Brown after their first attempt for a much larger package failed in 2015.

Months of gridlock between Democrats and Republicans over other matters, namely a tax hike on businesses, had put this year's transportation package in jeopardy as well. Last-minute negotiations scaled back its size and scope from the original $8.2 billion proposal, resulting in the final 167-page package approved this week in the final hours of the 2017 session.

If special interest groups decide to follow through with their threats to derail it at the ballot, HB 2017 would be placed on hold until voters decide its fate likely during the primary election next May.

Lawmakers in the state Senate stood up from their desks on the chamber floor in applause after casting the final vote.

"For too long our system has been falling in to disrepair," said Democratic Sen. Lee Beyer, who co-chaired the Transportation Committee. "The investments in HB 2017 will move freight more efficiently, reduce congestion in our cities, make our roads and bridges safer and expand mass transit options from border to border."

The bill raises tax revenue in several ways:

• A new .5 percent tax on purchases of cars, motorhomes and other recreational and sport-utility vehicles.
  
  
• A flat $15 fee on bicycle sales of at least $200 would be imposed to fund various bike and pedestrian infrastructure projects.

• Public transit projects to improve connectivity in non-urban areas would be supported through a new statewide .1 percent payroll tax on residents' paychecks from their employers, roughly $20 annually for the average minimum-wage earner.
  
  
• Seismic upgrades to bridges and other highway modernizations will be funded through a 10-cent gas tax increase and higher vehicle title and registration fees. The gas tax begins next year with a 4-cent hike and then 2-cent increases every two years; title and registration fees go up by $13 next year, followed by additional bumps in 2020 and 2022 while fuel-efficient vehicles would see even higher fees because they generate less gas-tax revenue.
  
  
• Eventually, metro Portland could see some highway tolls to ease the area's growing traffic problems.

It also included a compromise on the state's low-carbon fuel standard, which is designed to reduce greenhouse gas emissions but raised concerns among Republicans about spiking costs at the gas pump.

"The bill contains language that will insulate consumers from price spikes and fuel shortages, and grants flexibility to program administrators in dealing with emergency situations," said Republican Rep. Cliff Bentz, who was also a Transportation Committee co-chair.