Governor proposes 2-cent Oregon gas tax hike

SALEM, Ore. AP) — Motorists would see a 2-cent-a-gallon increase in the state gasoline tax and higher vehicle fees under a plan proposed Monday by Gov. Ted Kulongoski to pay for road and bridge improvements and create thousands of new construction jobs.

"This is the way to get Oregon out of this economic crisis," the Democratic governor said. "Building roads, bridges and public transit is good for the economy and our citizens by putting people back to work."

Kulongoski's plan, which he presented at a legislative hearing, also calls for doubling the vehicle titling fee to $110, raising the registration fee from $27 a year to $81 a year and creating a $100 first-time fee for titling cars new to the state.

Those increases would generate nearly $500 million a year and pay for 2,100 new construction-related jobs annually over the first five years, the governor said.

Kulongoski said public works programs are the most effective way to get people back to work at a time when Oregon unemployment has been near 6.5 percent — above the national average.

Kulongoski's plan drew a negative response from the Oregon Taxpayers Association. The anti-tax group said a 2-cent-a-gallon gasoline tax hike coupled with big increases in motor vehicle fees would be a hardship on motorists struggling to juggle household expenses.

"We're not going to get the economy moving again through tax increases. You can't grow the economy by growing taxes," said Jason Williams, the group's executive director.

Efforts to raise the state's 24-cent-a-gallon tax haven't been popular with Oregonians. The most recent try — a nickel-a-gallon increase — was thumped by Oregon voters in 2000.

Still, the Oregon-Idaho AAA applauded Kulongoski's plan, saying it would promote good roads and boost the economy.

"Certainly, a 2-cent gas tax increase should be palatable to most people," said AAA spokeswoman Marie Dodds. "We all realize that we need to support our infrastructure. And if we can create jobs in the process, that is a very positive thing."

The auto club's latest figures show that the price of gasoline continues to fall in Oregon and around the nation. The statewide average price for regular unleaded in Oregon hit an all-time high of $4.29 a gallon on July 3 but as of Monday had dropped to $2.40 a gallon.

Kulongoski said the drop might make a 2-cent gas tax increase easier for Oregonians to swallow, although he said intends to move forward with his plan regardless of fluctuations in gasoline prices.

"I think the public understands how important this is to them. This isn't a political event. This is about getting Oregonians back to work," he said.

Lawmakers from both parties have said investing in Oregon's transportation system is important, but that details of any such plan — and how to pay for it — will generate debate when the Legislature convenes Jan. 12.

House Republican Leader Bruce Hanna said he wants a better sense from his constituents about whether they would be willing to pay the higher motor vehicle fees. And Hanna said Republicans want assurances that the money will go for road expansion and improvement projects sought by local officials around Oregon.

Kulongoski and other backers of his plan say the benefits will be felt throughout the state, in urban and rural areas.

The governor's plan calls for spending $249.5 million on state highways, including increased maintenance and $15 million to continue planning the Columbia River Crossing replacement bridge between Portland and Vancouver.

It also contains $149.7 million for county roads and another $100 million for city streets.

The following is a press release from the governor's office on the issue:

(Salem) – Governor Ted Kulongoski today presented his transportation plan called “The Jobs and Transportation Act of 2009” to the Oregon House and Senate Transportation Committees. The Governor’s comprehensive transportation plan will create thousands of jobs, establish sustainable long-term funding for Oregon’s statewide transportation system and address greenhouse gas emissions in transportation construction and planning.  

“One of the most important investments we can make during a slow economy is in public works projects, such as transportation,” Governor Kulongoski said. “We have a long bipartisan tradition of investing in transportation in good times and in bad times. Building roads, bridges and public transit is good for the economy and our citizens by putting people back to work.”

Last year, Governor Kulongoski convened an advisory committee composed of business leaders, legislators, local and state officials, transportation stakeholders and sustainability and land use experts to develop recommendations for a comprehensive transportation package for the 2009 legislative session. The recommendations centered on how to meet immediate needs and provided guidance for future transportation investments.

“Oregon’s transportation system is not currently equipped to respond to the needs of a global economy, increases in population, rising energy costs, and our obligation to reduce greenhouse gas emissions,” the Governor continued. “The Jobs and Transportation Act outlines a strategy that reaches statewide, creates jobs, provides for continued investment over the long-term and helps reduce carbon emissions.”

The Governor’s Jobs and Transportation Act of 2009 invests $1 billion every biennium into the state transportation system, creating 2100 jobs annually over the first five years.  The plan includes policies to reduce vehicle-miles-traveled in urban areas, a dedicated fund for non-highway transportation investments, a new transportation utility commission, and dollars for rural counties hit hardest by the scheduled sunset of the federal forest payments. The Act also recommends a series of funding options, including bonding, a new vehicle title fee, and a path to transition away from the gas tax as the central funding source for transportation.

“This legislation is critical to Oregon’s economy today and for the long-term,” the Governor continued.  “It is the most robust, sustainable, strategic and green transportation package in Oregon history – and the time to enact it is now.

For a link to the Jobs and Transportation Act of 2009, click here.