Democrats in Salem are preparing to dig much deeper into your pocket with a massive transportation revenue bill, HB 2025. Because its multiple parts obscure its impact on individuals, let’s look at what it would mean for car owners, which is about 92% of households in Oregon. There are over two dozen increases to vehicle-related fees in the bill.
- Planning on buying a new car? Oregon’s zero percent vehicle sales tax has made it a great state in which to purchase a car. HB 2025 proposes a new Vehicle Sales Tax in the form of a 2% “transfer tax” on the sale price of new cars and a 1% tax on used cars valued at over $10,000. The average price paid for a new car in the U.S. in May 2025 was $48,799, according to Kelley Blue Book (Up from$21,041 in 2020).[1]That would mean a sales tax of $975.98 on your new car. The average price paid for a used car in Oregon is $35,556. That would mean a $335.56 sales tax.
- Fees for vehicle registration would go up, too. Registration of a new car would increase from $43 to $113.
- Oregon’s current vehicle registration fees for gas-powered passenger vehicles range from $126 to $156. The bill proposes a $66 increase to the existing vehicle registration fees. If you currently pay $126 to re-register your car, the cost could increase to $192 ($126 + $66) under HB 2025.
- The cost of new license plates would rise from $12 to $33.
- The cost to take a driver’s skill test at the DMV would increase from $45 to $111.
- Buying or owning a gas-powered vehicle? Oregon’s current 40 cent per-gallon gas tax would increase to 50 cents per gallon in 2026 and 55 cents per gallon in 2027. The gas tax would be indexed to inflation beginning in 2029. The average vehicle in Oregon uses approximately 489 gallons of gas per year. That would mean a $48.90 increase in gas costs in 2026 and a $73.35 increase in gas costs in 2027.
- Buying or own an electric or plug-in hybrid vehicle? A Road Usage Charge (RUC), a mandatory per-mile fee, would be imposed on electric and plug-in hybrid vehicle owners starting July 1, 2026 or these drivers could opt for a flat annual fee, initially set at $340. The proposed $340 annual tax is based on driving 18,000 miles a year at 20 mpg at the new gas tax rate
- A payroll tax that funds public transit via the Statewide Transportation Fund would increase from 0.1% currently to 0.3% by 2030. The tax would increase to 0.18% in 2026 and then to 0.25% in 2028 and 0.3% in 2030.
In a time of growing economic stress for Oregonians, it’s going to be enough to drive you to the poor house.
[1] That was up from the average price of $21,041 for a new car in 2000. In other words, not only will multiple costs associated with a car go up under HB 2025, but you will likely be making increasingly higher monthly payments on your new car because you’ll take longer to pay it off. While 3-year car loans were once common, they are less typical now. Today, the most common car loan terms are 60 months (five years) and 72 months (six years), and increasingly car buyers are agreeing to go with seven and eight year car loans, leading to higher total financing costs. Then there’s the growing cost of repairs. Garage repair costs are up are up over 43% in there past six years and the cost of fixing damaged cars has gone up 28% since just 2021, according to the U.S. Bureau of Labor Statistics.
ThinkingOregon 
This proposed Transportation Bill HB-2025 again disproportionately puts the failures of ODOT and transit agencies on the backs of the average motorist and hits those struggling to makes ends meet the hardest. In greater Portland – Metro between 60% to 70% of transportation investment dollar goes to everything but our roads, highways, bridges and tunnels. So that means the motorist and truckers pay taxes and fees and the great majority of the dollars collected from having and using our cars and trucks don’t go to our roads, highway bridges and tunnels that desperately don’t get the needed funding.
The Transit Payroll Tax funds transit system that only a very few use. These public employees making available the transit system are good people, but when no-one uses the service that they make available, you just don’t prompt them up. That is called “Feather Bedding” and that type of decision making leaves a very negative impression on the Critical Thinking Skills of everyone who is involved in doing it. TriMet as an example is a bankrupt organization and needs management change. However we see a first glimpse in some change as it experiments with Next Service which is like Lyft for the Special Needs and Handicap where from a smart phone riders can order out a trip. This running around huge empty buses and trains 99% seats empty with so few on them is insane. So “Payroll Transit Tax” increase funds services that so few use, that it is almost impossible to identify a direct “Benefit Analysis and Return on Investment” to those who contribute their dollars into this black hole.
Special allocations of revenue dollars fund things like the Rose Quarter Project on I-5 in intercity Portland. It has become a land-use redevelopment project capping the I-5 Freeway where physical roads and safety improvements cost $500 million, and redevelopment that has nothing to do with solving congestion cost $1.5 billion. This does not fix or create more I-5 capacity, it just creates a very big parking lot at the confluence of I-405 Fremont bridge, and I-84. In the late 1980 CH2MHILL had a contract with ODOT to design and build improvement in this area, and it was yanked when an assessment that ODOT and the State of Oregon could not fund out all that would be needed to solve the congestion problems of intercity Portland. It is to costly and politically impossible to widen the I-5 Corridor out through north Portland. The east bank I-5 corridor is 2 lanes leading up to inadequate sized lanes on the Marquam Bridge. It is equally impossible to create more capacity on I-84 going in and out of Portland.
I-205 was designed to be this critically needed bypass corridor and the land was acquired to allow for it to have 4-lanes in each direction. However ODOT and the political leadership have chosen to not remove a major bottleneck where 15% to 20% on the vehicles traveling in the I-5 corridor through intercity could get through Portland in half the time if there was a free-flowing I-205 Corridor with no-Bottleneck. The I.5 Billion to cap I-5 at the Rose Quarter would be all of the money needed to fund what could get traffic does not need to be in intercity making I-205 a more effective diversion route to be taken. This is just common sense, but we don’t have a lot of that