By CLAIRE RUSH
Associated Press

Oregon could become the second U.S. state to require electric vehicle owners to enroll in a pay-per-mile program as lawmakers began a special session Friday to fill a $300 million transportation budget hole that threatens basic services like snowplowing and road repairs.

However, the special session got off to a rocky start: The state Senate met as scheduled at 9 a.m., but the state House failed to reach the two-thirds quorum required to conduct business, leaving the session in limbo as of late Friday afternoon.

Legislators failed earlier this year to approve a transportation funding package. Hundreds of state workers’ jobs are at risk, and the proposal for a road usage charge for EV drivers was left on the table.

Hawaii in 2023 was the first state to create a mandatory road usage charge program to make up for projected decreases in fuel tax revenue due to the growing number of electric, hybrid and fuel-efficient cars. Many other states have studied the concept, and Oregon, Utah and Virginia have voluntary programs.

The concept has promise as a long-term funding solution, experts say. Others worry about privacy concerns and discouraging people from buying EVs, which can help reduce transportation emissions.

“This is a pretty major change,” said Liz Farmer, an analyst for The Pew Charitable Trusts’ state fiscal policy team, noting “the challenge in enacting something that’s dramatically different for most drivers.”

Oregon’s transportation woes

Oregon’s transportation department says the budget shortfall stems from inflation, projected declines in gas tax revenue and other spending limits. Over the summer, it sent layoff notices to nearly 500 workers and announced plans to close a dozen road maintenance stations.

Democratic Gov. Tina Kotek paused those moves and called the special session to find a solution. Republican lawmakers say the department mismanaging its money is a main issue.

Kotek’s proposal includes an EV road usage charge that is equivalent to 5 percent of the state’s gas tax. It also includes raising the gas tax by 6 cents to 46 cents per gallon, among other fee increases.

The usage charge would phase in starting in 2027 for certain EVs and expand to include hybrids in 2028. Should the gas tax increase be approved, EV drivers either would pay about 2.3 cents per mile, or choose an annual flat fee of $340. Drivers in the program wouldn’t have to pay supplemental registration fees.

Drivers would have several options for reporting mileage to private contractors, including a smartphone app or the vehicle’s telematics technology, said Scott Boardman, policy adviser for the transportation department who works on the state’s decade-old voluntary road usage charge program.

Republican lawmakers, who have opposed the tax and fee increases, unveiled a different proposal Friday that largely focuses on lifting funding restrictions to allow the transportation department to spend more money on maintenance operations, including by redirecting dollars earmarked for public transit and efforts to combat climate change toward such operations. It does not include a road usage charge.

As of May, there were over 84,000 EVs registered in Oregon, about 2 percent of the state’s total vehicles, he said.

Questions about privacy and fairness

In past surveys commissioned by Oregon’s transportation department, respondents cited privacy, GPS devices and data security as concerns about road usage charges.

Oregon’s voluntary program has sought to respond to such concerns by deleting mileage data 30 days after a payment is received, Boardman said. While plug-in GPS devices are an option in the program, transportation officials anticipate moving away from them because they’re more expensive and can be removed, he added.

Still, not everyone has embraced a road usage charge. Arizona voters will decide next year whether to ban state and local governments from implementing a tax or fee based on miles traveled after the measure was referred to the ballot by the Republican-majority Legislature.

Many people don’t realize that “both your vehicle and your cellphone capture immense amounts of data about your personal driving habits already,” said Brett Morgan, Oregon transportation policy director for the nonprofit Climate Solutions.

Morgan added that road usage charges exceeding what drivers of internal combustion engines would pay in gas taxes could dissuade people from buying electric and hybrid cars. Already, federal tax incentives for EVs are set to expire under the tax and spending cut bill recently passed by the GOP-controlled Congress.

“We are definitely supportive of a road usage charge that has EVs paying their fair share, but they should not be paying extra or a penalty,” Morgan said.

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State transportation officials on Thursday said that this summer they will ask for $1.9 billion to begin the 15-year task of replacing the Interstate Bridge.

The project is nearing the end of environmental review, and Oregon and Washington transportation officials are looking to advance the initial phases of two dozen construction packages for building the bridge and a network of interstate expansions and local improvements in Portland and Vancouver.

“So, not to bury the lead — it’s a large (transportation plan) request — probably the largest the agency’s seen,” said Ray Mabey, the project’s assistant program administrator, at Thursday’s Oregon Transportation Commission meeting. “That is not lost on me — the size and the meaning of that.”

The $1.9 billion would come from both Oregon and Washington state governments, as well as federal funds and expected tolling revenue. The formal request, expected in July, would come in the form of a Statewide Transportation Improvement Program amendment.

The massive ask includes $1.3 billion for construction, $433 million for preliminary engineering, $232 million for right-of-way acquisition and $10 million for utility relocation.

Initially, Oregon taxpayers will shoulder a heavier burden, with general obligation bonds totaling $249.5 million, while Washington will kick in $119.7 million. That will even out over time, and the states will cross-bill each other for project expenses, Mabey said.

The Oregon money will help pay for right-of-way acquisitions near Marine Drive and Hayden Island.

“For the particular projects we’re talking about, the right-of-way need is greater in Oregon,” Mabey said.

The total project was estimated in 2023 to cost $5 billion to $7.5 billion. That range is expected to grow when Interstate Bridge project officials release an updated cost estimate later this year or early in 2026.

Project officials are waiting on a record of decision — a final determination under the National Environmental Policy Act. That’s expected to arrive early in 2026.

“That record of decision is really the key pivot point for us to move into delivery, to start acquiring right-of-way, starting utility relocation, final design, as well as moving into construction,” Mabey said.

Meanwhile, the Bi-State Tolling Subcommittee will soon begin its work in earnest. Tolling on the bridge risks public backlash in Oregon, where such revenue collection is virtually unknown.

Tolling rates will be set in summer 2026, said Travis Brouwer, assistant director for revenue, finance and compliance for the Oregon Department of Transportation.

“This is the first time we’ve set toll rates on a bistate level in a long time,” Brouwer said. “So, we’re going to have to make sure that this follows the law in Washington, the law in Oregon and that those mesh well together.”

Toll scenarios range from $1.55 per crossing before the bridge is completed to $4.70 post completion. All scenarios assume a low-income toll program that will charge low-income drivers less.

Drivers will need to begin opening toll payment accounts and placing transponders in their vehicles, Brouwer said.

The project will take 15 years to build, Mabey said.

“It would take a lot less if we could actually close the interstate and build the whole program,” he said. “But when I asked (ODOT Director Kris Strickler) if we could do that, he said no, and he’s right. So, we need to maintain three through-lanes of traffic in each direction during construction to keep the goods and services and people moving through this corridor.”

The transportation officials sought to assure commissioners that the Trump administration remains committed to the project, for which grants were awarded under the Biden administration.

“What we have heard from this administration is a desire to get this project built and moving forward,” Mabey said. “We see that as a strong sign of support.”

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