Oregon eyes new EV tax to prevent ODOT layoffs

In an effort to prevent mass layoffs at the Oregon Department of Transportation, Oregon Governor Tina Kotek (D) is proposing a new, mandatory tax program for electric vehicles. While Republicans say the governor’s proposal would be unnecessary if the state managed its money well, the tax proposal is set to be considered today in a special session announced last month.

Oregon is attempting to fill a $354 million budget gap for transportation infrastructure construction and repairs, possibly resulting from vehicles becoming more fuel-efficient.

‘We invite Democrats to join us in funding essential services without raising taxes, to stand with Oregonians who cannot afford to shoulder more costs.’

“This could still be prevented today, without a special session, if Democrats made the decision to use existing revenue from the emergency board. We can still protect these jobs without raising taxes — and we should,” Oregon House Republican Leader Christine Drazan said last month. “We invite Democrats to join us in funding essential services without raising taxes, to stand with Oregonians who cannot afford to shoulder more costs.”

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Christine Drazan, former Oregon gubernatorial candidate and current House Republican Leader.Photo by Mathieu Lewis-Rolland/Getty Images

The proposal, according to the AP, includes an EV road-usage charge that is equivalent to 5% of the state’s gas tax. It also includes raising the gas tax by six cents to 46 cents per gallon, among other fee increases.

EV drivers would be required to enroll in a pay-per-mile system based on road usage. They could either pay 2.3 cents per mile or a flat $340 annual fee, with a break-even point just under 14,800 miles per year.

ODOT policy adviser Scott Boardman said drivers would have several options for the government to track their mileage, including a smartphone app and the vehicle’s telematics technology.

Oregon’s existing system, OReGO, which was launched on July 1, 2015, is currently a voluntary program. Kotek’s proposal would mark a departure from this system by making it mandatory. Skeptics warn that this may discourage car buyers from considering buying electric vehicles in the future, with the program set to take effect starting in 2027 and extending to hybrids in 2028.

If it passes, Oregon will join Hawaii as the only states to begin a mandatory pay-per-mile program for electric vehicles. Oregon lawmakers will debate and vote on the bill, which requires a supermajority in both the House and Senate to pass.

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