The Gas Tax Already Hits Rural Oregonians Disproportionately. Lawmakers Want to Raise it 50%.

A service station in Maupin, Oregon. Credit: Brian Burk

Last week, the Legislature’s Joint
Committee on Transportation released its long-awaited funding proposal for the
Oregon Department of Transportation.

The proposal, which would raise nearly $1
billion a year, includes a slew of ideas, such as higher title and registration
fees, a sales tax on vehicles, a road-use charge on delivery vehicles and
gradually moving all electric vehicles into a pay-per-mile program
(“Supercharger,” Oregon Journalism Project, April 2). It also features a
20-cent-per-gallon gas tax increase, phased in over six years. That would
increase the gas tax from 40 cents per gallon to 60 cents, a 50% increase.
(California’s current tax is 68 cents; Washington’s is 53 cents.)

A November report ODOT produced in
preparation for the funding package, however, shows that the gas tax does not
fall equally on all Oregonians.

Drivers in rural Oregon, the agency’s
data shows, drive far more miles than urban Oregonians and do so in vehicles
that travel fewer miles per gallon of gas.

“Rural residents drive farther to get to
work, school or shopping,” says state Rep. David Gomberg (D-Otis), whose
district includes the central coast and Coast Range. “And we drive less
fuel-efficient vehicles. Because the fact is that there are more pickup trucks
in Otis than there are in the Pearl District.”

Indeed, ODOT’s numbers show that rural
Oregonians pay more in gas taxes than urbanites, with the biggest difference
between those living east of the Cascades, who pay 71% more than people in the
Portland metro area (see table below).

Oregon built its gas tax system on a
“user pays” principle, although as the Oregon
Journalism Project has reported, the Legislature has failed its
constitutional duty to equalize payments from passenger vehicle owners, who
have underpaid in recent years, and heavy-truck owners, who have overpaid.

But the formula by which the Legislature
distributes gas tax dollars penalizes rural Oregonians (see table below). ODOT
gets half the proceeds; 30% gets distributed to Oregon’s 36 counties, based on
the number of vehicles registered; and 20% goes to cities, based on population.

“This system ignores that rural drivers
pay more in gas taxes yet receive less in return for road funding,” Crook
County Commissioner Seth Crawford says. “It’s frustrating.”

The state’s most populous counties, which
include its largest cities, get the lion’s share of the money the state
distributes, even though their residents drive relatively less. (There are
offsetting examples in other areas; income taxes from the Willamette Valley,
for instance, subsidize rural residents.)

Gomberg says this legislative session is
an opportunity for the Transportation Committee, which also says it hopes to
equalize the payment balance between light and heavy vehicles this year, to fix
the urban-rural imbalance.

“As long as we’ve had the gas tax, we’ve
had this problem,” Gomberg says.

Transportation Committee co-chair Rep.
Susan McLain (D-Hillsboro) notes that while rural motorists pay more in taxes,
they also benefit more from ODOT plowing and maintenance work. But she and
co-chair Sen. Chris Gorsek (D-Gresham) pledge to make the system more
equitable.

“As part of the ongoing conversations
around this package, relief for low-income drivers (especially in rural
communities) will be a North Star that we take very seriously,” Gorsek says.

—This story was produced by the Oregon Journalism Project, a nonprofit investigative newsroom for the state of Oregon. Learn more at oregonjournalismproject.org.