OReGO per-mile and Oregon fuels tax rates change in 2018

January 25, 2018

If you followed the 2017 legislative session, you know that Oregon lawmakers passed a new transportation funding package called “Keep Oregon Moving” (House Bill 2017). It’s a significant investment to help further what Oregonians value—a vibrant economy with good jobs, strong communities with a good quality of life, a clean environment, and safe, healthy people. This is a historic, once in a generation investment in Oregon’s transportation system that will pay dividends for decades to come.

What revenue sources will fund these investments?

Keep Oregon Moving increases the fuels tax and vehicle title and registration fees over a seven year period. The annual registration fees and title fees will be tiered based on vehicle fuel efficiency in order to ensure that more efficient vehicles that pay little fuels tax contribute their fair share for use of the roads. In addition, the weight-mile tax on heavy trucks will increase to ensure that trucks pay their fair share for their wear and tear on the roads.

All of these funds are constitutionally dedicated to the State Highway Fund and can only be used for roads. With the rate changes, drivers will get better roads that provide more reliable trips—for much less than people would pay to repair damaged vehicles if roads deteriorate.

What does that mean for OReGO drivers?

Because OReGO credits state fuels tax for drivers enrolled in the program, the per-mile rate was also increased to keep the road-charge-to-fuels-tax-credit ratio intact. The anticipated net impact for OReGO volunteers is minimal: most drivers will see very little difference, in the maximum range of $2 more to $2 less charged per 1,000 miles driven.

Here are the rate changes that affect OReGO drivers in 2018:
• Oregon’s fuels tax rate increases from 30 to 34 cents per gallon.
• The road usage charge rate increases from 1.5 to 1.7 cents per mile.

Future Oregon fuels tax increases will occur over a seven year period. After the initial 2018 rate change, the tax will increase two cents in 2020, 2022 and 2024 respectively (subject to ODOT meeting accountability and reporting requirements). The OReGO per-mile rate will change accordingly: to 1.8 cents per mile in 2020 and 1.9 in 2022.

A strong transportation system benefits everyone.

Even with the tiered increases, Oregon’s automobile taxes remain the lowest in the nation. At full implementation of Keep Oregon Moving in 2024, Oregon’s fuels tax will reach 40 cents per gallon. To compare, Washington’s rate was raised to 49.4 cents per gallon in 2016. California’s is estimated to reach 58.3 cents per gallon in 2019 and expected to continue to increase due to inflation indexing.

The funding from Keep Oregon Moving will make Oregon’s transportation system stronger, safer, and better poised for the state’s future needs. Learn more at http://www.oregon.gov/ODOT/Pages/HB2017.aspx.