Republican lawmakers press for special session to reassess Oregon’s vehicle taxes

Two Republican lawmakers are pressing for a special session next month to correct what they say is a growing unfairness in how the state taxes vehicles.

Sen. Brian Boquist, R-Dallas, and Rep. Anna Scharf, R-Amity, filed a request with legislative administrators on Dec. 13. That will kickstart a vote among all 90 lawmakers that will take place beginning this week.

If a majority of lawmakers in both chambers agree on the need for an emergency session — unlikely given that a regular legislative session will convene in February — lawmakers would convene in early January.

At issue for Boquist and Scharf is an ongoing disparity in the proportion of road taxes paid by heavy trucks that transport freight, as opposed to light vehicles such as cars. The two classes of vehicles pay into the state’s road maintenance fund in different ways — cars via fuel taxes, heavy trucks via a weight-mile tax. Both pay registration fees.

The Oregon Constitution says that the amount paid by the two types of vehicle needs to be “fair and proportionate to the costs incurred for the highway system because of each class of vehicle.” But that’s not currently the case.

According to a study conducted for the state this year by the firm ECOnorthwest, heavy vehicles are expected to overpay for their share of road costs by more than 32% in the 2023-25 biennium. Light vehicles are expected to underpay by 12%. What’s more, heavy vehicles overpaid by a lesser amount from 2021 to 2023, another state study suggested. The disparity has increased partly because the state is paying for more bike and pedestrian-related projects, this year’s study said.

“It got ignored during the ‘23 session,” Scharf told OPB. “[Democrats] knew it was a problem. They weren’t going to address it.”

Scharf and Boquist are now trying to force the issue. Special sessions in Oregon are typically called by the governor. But under state law, lawmakers can call themselves into session. If at least two legislators — one in each chamber — initiate a vote on whether to hold an emergency legislative session, ballots are sent to lawmakers.

“These illegal collections increase the cost of every transported consumer good in the state such as milk, bread, baby formula, utilities, and nearly every service,” the notice Scharf and Boquist sent to Legislative Administrator Brett Hanes reads. “Working poor, fixed income, single families, hand-to-mouth individuals, and even the homeless whom are impacted can no longer afford this excess as the economy continues to decline, inflation remains, and war looms. A one-day special session can remedy this situation.”

Hanes said last week that ballots would go out to lawmakers in the middle of this week, setting off a 14-day deadline by which they must be returned to be counted. If 31 state representatives and 16 senators agree on the need for a session, leaders must convene one — though even supporters of such a session acknowledge it’s extremely unlikely.

But what a remedy would look like is unclear.

In November, Kris Strickler, director of the Oregon Department of Transportation, sent lawmakers a list of possibilities to bring revenues for light and heavy vehicles in line.

The state could slash weight-mile taxes by around 33%, creating further funding difficulties for the agency as it struggles to maintain state highways. The state could also increase taxes on light-duty vehicles by around 50% — including a 30-cent-per-gallon gas tax increase — resulting in more money for his agency. Or officials could try a revenue-neutral option by cutting back heavy vehicle fees by some and raising light-duty fees by some, including an 8-cent-per-gallon gas tax hike.

Boquist, who recently changed his party registration from Independent to Republican, told OPB that he’s requested a bill be drafted that would cut weight-mile taxes alone. He also proposes a credit to trucking companies that have overpaid in recent years.

Scharf suggested Democrats should find money to make up any resulting budget shortfall for ODOT in other places.

“What do you do? Do you increase the gas tax? Do you decrease the weight mileage tax?” she said. “Or do you have a more fruitful conversation of: Where is the overspending being in the overall state budget?”

Oregon’s top legislative Democrats, Senate President Rob Wagner and House Speaker Dan Rayfield, did not show much interest in the proposed special session Monday.

“We have a session starting in a few weeks here,” said Connor Radnovich, a spokesman for Wagner. “During that session, lawmakers are going to be taking up the issues that are most important to Oregonians... Legislators are also going to have an opportunity to bring up issues like this.”

ODOT funding has been on lawmakers’ radar for years. Dwindling gas tax revenues have prompted increasingly urgent pleas from the agency, such as earlier this year when it said it would have to cut back on plowing this winter because of a lack of funding. Gov. Tina Kotek and lawmakers eventually agreed to spend $19 million to ensure maintenance services wouldn’t be hampered.

But a more permanent solution is likely to be more than a year out. Democrats have signaled they will take up a major transportation funding package in the session that convenes in January 2025.

Scharf said Monday that she’s worked on the issue with the Oregon Trucking Associations, an industry group representing freight haulers. Part of her motivation for forcing a vote, she said, is to make citizens aware of the issue.

“This does get it on the radar,” she said. “The average Oregonian doesn’t know about this.”