QuickTake:

Lane County localities, like others in Oregon, are strapped to pay for transportation and roads. A proposal in the Oregon Legislature may help — and also raise the state’s gasoline tax and fees. 

Correction: This story has been corrected to reflect that voters have to approve Eugene’s bond measure for transportation needs every five years.

Oregon legislators are eying a potential path forward to pay for the state’s transportation needs and prevent roads and bridges from crumbling and weakening in the years ahead from neglect. 

They are considering House Bill 2025, which would increase the state’s gasoline tax by 10 cents a gallon initially: up from 40 cents to 50 cents in 2026. From there, the gasoline tax would increase to 55 cents in 2028 and be indexed to inflation in 2029 and beyond. 

The bill also includes a slew of proposed fee increases for new and renewed driver licenses, vehicle registrations and car sales, among other items. The bill would raise an estimated $2 billion annually in new revenue funding for transportation needs by 2034, a draft analysis of the bill released Friday shows. 

The wide-ranging bill comes amid longstanding concerns that Oregon’s existing system of funding transportation, including the gasoline tax, is antiquated and fails to meet the rising costs and needs in the state. 

Localities, including Eugene and Lane County, face rising costs and already struggle to maintain their existing transportation systems. In Eugene, for example, more than 12% of the lanes on city roads are in poor or very poor condition, a 2024 city report shows. That means they need either substantial repairs to fix pavement with problems like cracks and potholes or need full reconstruction. 

Local officials and transportation experts say the changes are sorely needed to prop up local budgets. Others, including Republican lawmakers and Oregonians opposed to higher taxes, say the proposal reaches too deeply and fails to hold the Oregon Department of Transportation accountable for its spending and management. 

This week, the Legislature’s Joint Committee on Transportation Reinvestment offered hearings for four days, gathering wide-ranging views and testimony about the bill. At this point, it’s not clear what new projects in Lane County the bill may cover. But officials and experts also stress the need for cash to maintain the system already in place.

“There is a need for more funding,” Rob Zako, executive director of the nonprofit Better Eugene-Springfield Transportation, said in an interview with Lookout Eugene-Springfield. “A lot of that funding is going to go to the state, to counties and cities to maintain highways, roads and streets that we need to do; absent that money, all sorts of things are going to stop working.”

The nonprofit organization advocates for better streets, transit and other transportation features like sidewalks and bicycle lanes. 

Local needs 

In testimony to legislators, local officials spoke about the need for sustainable funding. 

Lane County Commissioner Heather Buch told lawmakers the county once fared better when it relied upon timber revenues. Now, the state highway fund is what covers the county’s 1,400-mile infrastructure, much of it built more than 100 years ago, she said in submitted testimony. 

“And with escalating costs, we are falling further behind in our maintenance and preservation backlog,” Buch wrote in the letter to lawmakers. “Without action toward a more modern and sustainable State Highway Fund, counties face a grim reality: deteriorating roads, aging bridges, and reduced maintenance capacity.”

The Legislature needs a transportation package that is comprehensive, Buch said. 

“Facing challenges from inflation, declining fuel consumption, reductions in federal funding, and limited local revenue raising options, counties across Oregon have had to postpone routine maintenance and crucial safety upgrades, leading to a decline in road quality and safety,” Buch said.

The current state gasoline tax of 40 cents provides Eugene with nearly $14 million a year for its transportation needs. That pays for maintaining roads, streetlights, traffic signals and signs.

In Eugene, a local gasoline tax of 5 cents a gallon provides more money: about $2.9 million annually. A bond measure, passed in 2008, also generates another $12 million a year in property taxes for Eugene’s needs. Voters have renewed the bond measure every five years since then.

Even so, the needs remain high, Rob Inerfeld, Eugene’s transportation planning manager, told lawmakers. The city has a repair backlog of about $158 million, even with those additional sources, he said in a letter to the committee.

Many lane miles – the equivalent of one lane on one mile of a street —are in need of major overhauls in Eugene. Eugene has 1,408 lane miles. Of those, 4.3%, or about 60 miles, are ranked in “very poor” condition, meaning they need full reconstruction. Another 8.4%, or 118 miles, are in poor condition, requiring substantial repairs and overlays, city records show. In comparison, about 40% of lane miles are in excellent condition, while the rest are considered very good to fair.

Elsewhere in Lane County, the cities of Springfield and Cottage Grove each have a 3-cent per gallon gasoline tax. 

Transit needs 

Transit needs are also in the mix: the bill would raise the payroll tax that pays for transit services across Oregon. 

Currently, the payroll tax for transit services is a rate of 0.1%, or one-tenth of 1%. That’s $4.17 a month for a person who earns $50,000 annually. 

The increase proposed in the bill would initially go up in January 2026 by 0.08 to 0.18%, bringing the total to $7.50 a month for that same person making $50,000 annually. The payroll tax would have phased-in increases to 0.3% by 2030, or $12.50 a month for someone making $50,000 annually.

Sam Kelly-Quattrocchi, government relations director for Lane Transit District, said the proposed increase in the bill will allow for more transit and mobility opportunities. In the Lane Transit District, passengers board buses more than 5 million times annually. 

The transit district always looks for ways to expand or better serve people and currently has a couple of pilot projects in rural areas, Kelly-Quattrocchi said.

At this point, he said, specific projects are not identified that the proposed increase would cover.

One example of a potential use is backfilling federal grant dollars that are canceled or uncertain, he said. LTD is waiting to find out if it will still get a $5.2 million federal grant to start a pilot project to increase mobility in rural Bethel. The district’s proposed grant project would use an app to guide residents to transportation options, without increasing existing routes.

Rural transit needs would also get a boost. 

Officials with LinkLane, which provides bus routes between Eugene and Florence and Florence to Yachats, also see benefits to the proposal.

The routes include a mix of users, including hikers, tourists and residents, said Kate Wilson, senior planner with the Lane Council of Governments, which runs LinkLane.

Since the routes started — both within the last seven years — ridership has increased by 10% or more each year, Wilson said. The Eugene to Florence route had 10,400 riders in 2024, while the Florence to Yachats route had more than 3,100 riders.

LinkLane relies upon discretionary funding from the state every two years for the transit routes. It’s a model that means transit providers across the state have to compete for a limited pool of funding.

The payroll increase will make it easier for the transit provider to have sustainable funding, Wilson said. 

“We all want to make sure initially that we can sustain and continue to grow in sustainable ways,” Wilson said.

Ben Botkin covers politics and policy in Lane County. He has worked as a journalist since 2003, most recently at the Oregon Capital Chronicle, where he covered justice, health and human services and documented regional efforts to fentanyl addiction. Botkin has worked in statehouses in Idaho, Nevada, Oklahoma and, of course, Oregon. When he's not working, you'll find him road tripping across the West, hiking or surfing along the Oregon Coast.