Bloomberg, Oregon Voters Reject Gasoline Tax Increase as Pump Prices Soar:
Oregon voters repealed a 6-cent per gallon fuel tax increase enacted last year to shore up the state’s transportation budget, throwing long-term funding into uncertainty.
About 83% of voters rejected the tax increase, which was passed by the Democrat-controlled legislature in a special session last September, according to AP results of Tuesday’s primary. Had it passed, the gasoline levy would have climbed to 46 cents a gallon.
The voter referendum also turned away a higher payroll tax for transit projects, and significant increases in vehicle registration and title fees authorized in the transportation law (HB 3991).
The vote was carried out as the war in Iran has pushed gas prices nationally to the highest point in four years, and in a state with some of the highest fuel prices in the country. The state average was about $5.35 a gallon on Wednesday, according to AAA, more than 80 cents above the US average.
Republicans easily secured the needed signatures to put the question before voters last fall, months before the gasoline price surge.
Transportation budgets across the country rely heavily on fuel taxes, and any effort to raise them can be politically fraught, especially now that affordability has become a key talking point.
The Oregon Department of Transportation faced a roughly $350 million budget shortfall heading into the 2025 legislative session before lawmakers stepped in to fill the hole. A state gas tax increase would have helped bring in longer-term revenue for the department, officials said. The rejection of that increase means lawmakers will have to find other sources of revenue in the coming years to finish major road projects and for maintenance.
In 2015, Oregon was the first US state to experiment with an alternative source of revenue to the gasoline tax, piloting a miles-traveled fee for anyone driving a fuel-efficient or electric vehicle. But, like other states and the federal government, it’s unable to phase out fuel taxes anytime soon.
