Oregon Gov. Kate Brown (D) on June 28 announced a compromise agreement on a new transportation spending package. The plan includes $4 billion in new taxes and fees, but loses many features of an earlier proposal which would have generated $8.2 billion. Highlights include:

  • The new package removes previously earmarked funding, including $1.1 billion in freeway widening projects. These projects would now possibly require toll revenues for funding;
  • The gas tax would increase 10 cents-per-gallon over the next eight years, less than earlier packages (raising $200 million/year);
  • New state payroll taxes would fund mass transit (.1%, raising $107 million/year);
  • Vehicle registration and weight fees would be raised;
  • A new car sales tax (0.5 percent less than the original proposal), with half the revenue dedicated to rebates for electric vehicle purchases.

Environmentalists have secured a $12 million annual rebate program for electric and hybrid vehicles, providing a $1500-2500 subsidy on purchases to up to 6000 people each year. The rebates will prioritize residents in low income and/or high pollution areas. However, subsidies for alternative fuels will have a cap (around $500 million/year).

Lawmakers have less than two weeks to finalize and vote on the plan. Read More>>

Katherine Jones, ARTBA Economics Intern, contributed to this report.