Depleted highway coffers demand a new infusion

Property taxes, income taxes, sales taxes and most other governmental taxes have one crucial element in common.

They are based on percentage rates applied to ever-rising dollar volumes. That serves to automatically index them for inflation, at least to the extent they aren’t placed under artificial restriction.

That’s also true with gas taxes in 24 states, but not in the other 26. And Oregon is among the holdouts, still charging a fixed amount per gallon and suffering severely as a result.

Suffering why? Because the cost of road and bridge construction is soaring to new levels at the same time automotive fuel efficiency is soaring to new heights.

The latter is attributable to growing electrification of the fleet, coupled with striking efficiency increases in its remaining gas-powered component. As a result, motorists are paying significantly less in actual dollars with each passing year, starving Oregon for desperately needed road and bridge revenue.

With the property tax, rising market values work the magic allowing the government bite to remain relatively constant. With the income tax, it’s rising incomes; with the sales tax, rising prices.

And get this:

A number of states impose a substantial sales tax at the pump on top of a substantial gas tax. Many northeastern states also engage in extensive tolling of state and interstate highways.

Meanwhile, most states, including neighboring Washington, charge vastly higher title and registration fees. Most, including Washington, also assess a sales tax burden running into the thousands on automobile purchases.

All this brings us to the only statewide measure appearing on Oregon’s May primary ballot — GOP-backed referral of a transportation funding package pushed through in the dying days of the 2025 session by the state’s majority Democrats.

A yes vote upholds a 6-cent hike in the gas tax to 46 cents, an increase in the public transit payroll tax from 0.1% to 0.2%, an increase in title and registration fees, and fair-share elements increasing the fee impact on electric car owners while easing the weight-mile bite on truckers. A no vote sends the Legislature back to the drawing board.

We are under no illusion about the package’s chance of winning approval at the polls.

With Republicans smelling political blood in the water, Democrats and their deep-pocketed funders are taking a pass. That leaves the field almost entirely to nay-sayers, and tax measures are hard to pass even when the support and opposition are better balanced.

But adequate road and bridge infrastructure is critical to manufacturing, construction, tourism, travel, commuting and other key elements of collective well-being in Oregon. It does not pay for itself, and if there is a better, more equitable method than a fuel tax based on actual usage, it has escaped the notice of the federal government, the District of Columbia and all 49 of our fellow states.

In fact, Oregon came up with the idea in the first place. It enacted the nation’s first gas tax in 1919, pioneering a transportation funding system uniformly adopted by other states over the following decade, and by the federal government itself in 1932.

Both the Oregon tax and federal tax started at 1 cent. But back then, gas was selling for less than 25 cents a gallon.

Gas is currently averaging $4 a gallon on the national level, and almost $5 on the state level. So a 6-cent bump would amount to a miniscule 1.2 percent in Oregon — not really a material amount.

The motorist driving 10,000 miles a year at 20 miles a gallon pays Oregon just $200 a year to help build and maintain the roads he’s plying.

The package at issue would add only $30 to that contribution. Switching to a car getting 40 miles a gallon, which can be done these days even without going electric, would cut his total bite to $100 at the current tax rate, or $115 with the new one.

The joint American/Israeli attack on Iran has driven up the price of gas a dollar a gallon in a matter of weeks.

That relegates the 6 cents Oregon is seeking to the order of a rounding error — an amount utterly inconsequential by comparison. And unlike the massive collateral-damage war penalty, we would stand to reap a handsome reward in the way of Oregon road and bridge improvements.

The federal gas tax has stood at 18.4 cents in the U.S. for more than 30 years, but runs multiple times that in Canada, Japan, England, Germany, France and most other developed countries. And here on the West Coast, our neighboring states to the south and north are charging 71 and 59 cents a gallon, respectively.

Granted, the size of the bite is not the only issue.

Many Oregonians view the Oregon Department of Transportation as a bloated, bureaucratic and unresponsive agency. On that score alone, they may find justification for withholding their hard-earned dollars.

We agree in part, but not in whole. We think there is a core element of truth that is being blown out of proportion for partisan political advantage.

The package referred to voters in the May 19 primary would give the highway fund a projected infusion of $4.3 billion over the next 10 years. But it started at $14.6 billion, which much better approximates the real need.

If we had our way, voters would reluctantly pass the ballot measure as a starting point. Grateful state leaders would then reward them by overhauling and streamlining ODOT to make it more nimble, efficient and responsive in return.

Our recommendation?

Hold your nose if you must, but vote yes if you really care about Oregon’s economy and livability. In the grand scheme of things, it’s a very small price to pay.