LOC News
Update: 2025 Transportation Package TRIP25
While there are no new details to report on the transportation package, the Joint Committee on Transportation on Reinvestment (JCTR) provided an update this week on its work, with committee members present. This document was shared with legislative leadership and provides an overview of the remaining work on the transportation package for this session. The update includes the following highlights:
- Stabilize funding for the Oregon Department of Transportation (ODOT), focusing on core services of maintenance, operations, safety, and preservation, while maintaining the 50/30/20 split among the state, counties, and cities.
- Reduce the reliance on fuel taxes to fund state and local transportation systems in the medium and long term and modernize funding structures to adjust to the transition to higher fuel-efficiency vehicles and electric vehicles, ensuring all users of the systems pay their fair share.
- Simplify the weight-mile tax from 85 tax rates down to 10 tax rates and streamline the collection of the associated revenues while balancing highway cost allocations between light and heavy vehicles.
ODOT Accountability – Remains a Key Element of the Package.
- Identify targeted efficiencies in ODOT’s budget to focus on the delivery of core services and major projects.
- Ensure internal and external accountability measures are in place, including appropriate legislative oversight of major projects, and propose reforms to management structures, operational processes, and major project delivery.
- An additional audit into ODOT’s big-project program was presented this week to the JCTR. The full report is available online, including recommendations for improving ODOT’s decision-making.
New Funding Mechanism Being Discussed, maybe.
The JCTR is evaluating the use of revenue generated from the current Climate Protection Program (CPP) in a market-based emissions reduction program known as Cap & Trade. The CPP was an Oregon Department of Environmental Quality (DEQ) response to former Governor Kate Brown's Executive Order 20-04, which directed state agencies to take action. The CPP has withstood a legal challenge from the business community and is estimated to be capable of generating more than $150 million annually. The JCTR believes there is a linkage to transportation investments. This funding source is also being discussed for gap funding in wildland fire and resilience investments. California has recently dedicated revenue from its Cap and Trade program to help with wildland fire and resilience funding.
What’s Next
We are expecting to see the actual bill language next week. Hearings are expected June 9 and 10. We suspect that much of the work that has been ongoing for weeks has been aimed at securing support for various elements of the original framework, referred to as TRIP 2025. The actual bill number will also be shared next week, but we anticipate it will be HB 2025.
Other Information of Importance -
Cities – Using the base framework document of the Transportation Reinvestment Package (TRIP), the LOC has calculated estimates for each city’s distribution increase at the time of full implementation, which is scheduled to occur in 2032. Cities' proportional distribution is based on population, while counties' distribution is built from vehicle registrations. Cities are expected to gain $170 million annually by 2032-33, which, given the FY 2024 distribution of $238 million, roughly equates to a 71% increase over eight years.
TRIP 2025 Details -
A projected funding level of $1.9 billion per biennium is significant because this translates into $340 million of additional revenue to cities per biennium, or $170 million per year.
Public Transit Enhanced - Given a proposed increase in the payroll tax, all communities with public transit will have additional funding available to enhance their services. For rural and frontier communities, TRIP 2025 will expand or initiate public transit options. Currently, all recognized transit agencies, such as TriMet, Cherriots in Salem, and Rogue Valley Transit in Jackson County, receive a funding allocation. In addition to the transit agencies, 22 counties and eight federally recognized tribes receive funds for their programs and distribution to small transit programs.
Electric Vehicles Will Pay Their Fair Share. Until TRIP 2025, capturing a fair share of revenue from electric vehicle (EV) owners has been limited to registration fees, which are twice those of an equivalent gas or diesel vehicle. Based on recent data analysis, this captures only about one-third of what would be considered a fair share. Under TRIP 2025, starting in 2026, all existing EVs will transition to a road user fee (RUF) structure, whereby EV owners will pay a tax equivalent to their vehicle usage. Today, with more than 100,000 registered EVs, the addition of a RUF equivalent to the current .40 state gas tax would generate an estimated $14 million in new revenue.
There will also be an anticipated fee associated with using public charging stations to capture a RUF for vehicles registered outside of Oregon.
Oregon has the lowest vehicle-related tax burden among western states. The Oregon Department of Transportation (ODOT) has updated several metrics related to buying and operating vehicles in Oregon. When you look at a metric such as a new vehicle purchase, it's clear that Oregon vehicle owners pay markedly less than the next closest state of Idaho.
The LOC built a comparison using a $40,000 vehicle purchase, each state’s gas tax, and average miles driven in each state. Based on this, Oregon’s estimated annual tax burden for a passenger vehicle is $445. With the additions in TRIP 2025, this estimated tax burden is roughly $1,172 by the year 2032 at full implementation. In Oregon, because the one-time system fee of 1% and the vehicle privilege tax of .5% - increasing to .8% under TRIP 2025 - are only applied at the time of purchase and not annually, the additional cost increases under TRIP 2025 drop to approximately $500 for each subsequent year.
Note: this is for the costs associated with a single-year vehicle purchase. Other states' registration fees include prorated/or amortized values in the future registration fee structure. Nevada is the highest state to register new vehicles, largely because of a possible 8% sales tax, with California close behind. Idaho is the closest to Oregon in the western U.S., but still more than double Oregon’s current level and roughly 80% higher with TRIP 2025 in place.
Contact: Jim McCauley, Legislative Director – jmccauley@orcities.org
Last Updated 5/23/25