Oregon Governor Proposes EV Tax to Avoid Layoffs

In a bid to avert significant layoffs at the Oregon Department of Transport, Governor Tina Kotek is introducing a new tax initiative targeting electric vehicles. However, Republicans argue that this move may be unnecessary if the state allocates its funds more effectively. The tax proposal is set to be discussed today during a special session that was called last month.

Oregon is grappling with a substantial budget deficit of $354 million, which is critical for the construction and maintenance of transportation infrastructure. It seems like this could be partly due to vehicles becoming more fuel-efficient over time.

One lawmaker commented, “We encourage Democrats to find funding for essential services without imposing additional taxes, aligning with Oregonians who are already feeling the financial pinch.” They went on to say that if the Democrats were to make different decisions regarding current revenue, then those job losses might still be avoided without requiring a special session. They emphasized the need to support Oregonians who can’t afford increased taxes.

As part of the proposed changes, the Washington Post reports that road usage fees for electric vehicles would be set at 5% of the existing gasoline tax, with an increase in the gasoline tax itself to 46 cents per gallon.

Under this new system, EV drivers would need to register for a pay-per-mile plan. They have options: either pay a flat fee of $340 or 2.3 cents for each mile driven, which averages out to just under 14,800 miles annually. It’s a bit hefty, maybe? But it’s aimed at capturing road usage more accurately.

Scott Boardman, an advisor at ODOT, mentioned that there are various methods through which the government can track mileage, including mobile apps and vehicle telematics. Currently, Oregon operates a voluntary mileage tracking program called OReGO, which began in 2015. Kotek’s initiative, however, proposes making participation mandatory. Critics are concerned this might deter potential buyers from electric vehicles, particularly as the program is set to extend to hybrids by 2027.

If enacted, Oregon would join Hawaii as one of the only states to implement a mandatory pay-per-mile program specifically for electric vehicles. Legislators in Oregon will debate the bill, which needs to pass through both the House and Senate to become law.