Strategic Pillar II: Grow the Economy — Transportation & Infrastructure
On the Move: Tax policy, state investments and policy changes to build and finance Oregon’s transportation & infrastructure systems
Background
• Improvements in fuel economy, while good for the economy and for
the environment, have reduced the effectiveness of the per-gallon
fuel tax used to raise revenues for highways. Vehicles have been
driven more cumulative miles, adding to demand on operations,
maintenance and capacity, while fuel economy has reduced the
amount of revenue contributed by each mile traveled. The current
$0.30 per gallon fuel tax is not indexed to inflation, and has not been
adjusted since January 2011.
• The ongoing maintenance needs for the state’s roads are estimated to
be well over $300M per year. Given the needs of the state’s transportation
infrastructure, and its insufficient funding source, changes are
needed.
• Economic development in Oregon requires that we make significant
investment in non-highway, multi-modal transportation infrastructure
as well, including air, marine, rail, road, bicycle, pedestrian
and public transportation. OBA has and continues to support
ConnectOregon, which invests the proceeds of lottery-backed bonds
in grants and loans to non-highway transportation projects that promote
economic development in Oregon.
Why_Invest_in_Infrastructure

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Solutions

Tax policy

Highway maintenance, preservation and modernization: The ongoing maintenance needs for the state’s roads are estimated to be well over $300 million per year. In addition, numerous highway enhancements are sorely needed across the state; this need is estimated at $130 million per year. Given the needs of the state’s transportation infrastructure, and its insufficient funding source, the OBA proposes the following:

Increase the fuel tax and
index it to [Oregon CPI or
another appropriate index].
In addition, the state should
increase vehicle registration
fees percent to raise the
appropriate amount of
revenue.

State investments

OBA proposes that the legislature:
Pass a significant ConnectOregon VI, with funding in excess of $50
million for the 2015-17 biennium. Funds would be used for grants
and loans to support capital projects that involve one or more of the
following modes of transportation: air, marine, freight rail, passenger
rail, public transit, bicycle and pedestrian.

 

Policy change

Road user fees:The legislature should direct the Road User Fee Task Force to develop an implementation phase-in strategy for transitioning the gas tax to a Road User Charge with the goal of developing the means to replace the fuel tax and supplement registration fee funding in the near future.