Legislative Leaders Overreach with Transportation Package

By Oregon Business & Industry,

What happened: On June 9, with less than three weeks remaining in the 2025 session, legislative leaders finally released a transportation funding package, the 102-page HB 2025.

The proposal includes nearly a dozen new or increased taxes and fees, from a 37.5% increase in the gas tax to a tripling of the employee payroll tax used to fund public transit. While legislative leadership did not have an estimate when the bill dropped, they indicated that they expected it to amount to about $1 billion in revenue and spending per year. However, as reported by The Oregonian, a draft report issued by the Legislative Revenue Office shows that figure at $1 billion per year by 2028 and $2 billion per year in 2033. The report is not yet posted to the bill’s informational page.

Far from “basic”: Oregonians were told they’d see a “back to basics” transportation package this year, OBI noted in testimony submitted June 11. Yet HB 2025 would fund proposals that far exceed the basics, including new programs and initiatives. A “back to basics” package, OBI argued, would include the completion of projects promised in 2017 as well as modest spending to ensure that ODOT can maintain basic services. OBI would support a funding package that delivered on past promises, included accountability measures and legislative safeguards, and spent responsibly on core services.

Some of the problems: OBI’s testimony noted several problems with the bill, including the lack of legislative safeguards for gas tax increases; the lack of sunsets or reauthorization requirements; and the tripling of a payroll tax paid by all working Oregonians for public transportation used by a relative few – who often aren’t charged for their use.

More modest proposal: OBI urged legislators to pare back the package, focus on genuine basics and give ODOT a chance to prove that it can manage significant projects on time and within budget.