For many people, buying an electric vehicle was a step into the future. Not only did it mean driving a car powered by electricity, but it also meant no longer relying on fossil fuels, like gasoline, to power your car. That helps reduce carbon emissions from Oregon’s highest emitting sector — transportation.
As EVs became more popular over the years, tens of thousands of Oregonians across the state were able to purchase their vehicle at a lower price through federal and state rebates. At one point, qualified Oregonians could have gotten up to $15,000 in rebates. That helped provide some relief against the higher sticker prices and registration fees for these vehicles in the state.
Now, a new proposal under Gov. Tina Kotek’s transportation bill would require EV and plug-in hybrid drivers to enroll in a program that would charge them a per-mile fee, or a “road usage charge,” for driving on any Oregon road.
The state says it needs the charge to fill the Oregon Department of Transportation’s $300 million budget gap. That gap exists, in part due to more people buying EVs — and no longer paying the state’s 40-cent-per-gallon gas tax, which goes toward things like road maintenance.
In testimony, advocates for drivers of gas-powered cars said they support the governor’s legislation.
But environmental groups — and people who already have EVs — say the governor’s current proposal could deter people from driving these vehicles, and could significantly slow down emission reductions from the transportation sector.
Charging per mile
The idea for a road usage charge, or a per-mile fee, isn’t new in Oregon. In fact, there is already a voluntary program in place for EV drivers called OReGO. Oregon was the first state in the nation to launch a road usage program, and it’s been in place since 2015, according to ODOT’s innovative programs policy advisor Scott Boardman.
Under that program, participants pay 2 cents for each mile they drive. The money generated goes into the State Highway Fund, which maintains roads and bridges. The rate was calculated to match what the driver of a gas-powered vehicle that gets 20 miles per gallon would pay in gas taxes — 20 miles per gallon was the average efficiency at the time the program launched.
As of Aug. 15, the OReGO program had 849 vehicles enrolled.
The gas tax has provided the funding necessary to keep up with road maintenance for years, but gas-powered cars have become more energy-efficient and now get more MPG. And there are more electric vehicles on the road than ever, Boardman said.
As of April, there are more than 117,000 electric or plug-in hybrid vehicles registered in the state.
Boardman said these vehicles are paying less for the wear and tear they cause than less efficient cars and trucks. That has created a gap in road funding.
“If we switch to a road usage charge, in which people would be paying by the mile, it kind of decouples the amount that you’re paying in transportation taxes and fees from the efficiency of the vehicle to the actual usage of the transportation system itself,” Boardman said.
Under the proposal, which legislators will consider when they convene for a special session in Salem on Friday, electric and plug-in hybrid vehicles would be required to sign up for the OReGO program.
The charge would remain the same, at 2 cents per mile driven anywhere in the state.
“The less you drive, the less you pay, versus the more you drive and the more wear and tear that you impose on the system, the more you contribute to the operations and maintenance of the roads and the bridges,” Boardman said.
If the proposal becomes law, the state’s registered vehicles would not all be required to sign up at once, he said.
It would require current EV owners to sign up for the program when they renew their registration after July 2027. After that, new EV owners will be required to sign up for the program starting January 2028.
Hybrid electric and plug-in hybrid electric vehicles would be phased in beginning July 2028.
High registration fees and low miles per gallon
But environmental, climate and electric vehicle advocates say the current proposal is flawed.
Brett Morgan, transportation policy director with nonprofit advocacy group Climate Solutions, pushed back against the suggestion that EVs are not paying their fair share of taxes.
Currently, EV and plug-in hybrid drivers pay higher registration fees than vehicles that get between 20-39 MPG. As of now, electric vehicle drivers pay $316 for registering their vehicle for two years — more than double what drivers of less efficient vehicles are charged. EVs also pay an additional $115 per year in supplemental fees.
Under Kotek’s proposal, that cost would drop to $85 for two years. EV and plug-in hybrid users would no longer pay a supplemental registration fee after signing up for the road use charge program.
While those registration fees may drop, Morgan said, EV and plug-in hybrid drivers in the program could still wind up paying nearly $200 more per year than the driver of a car that gets 20 MPG. That’s because of the road use charge.
An ODOT official said the agency’s own analysis disputes Morgan’s math and concludes that EV drivers would pay less than 20 MPG vehicles if Kotek’s road-use charge proposal passes and the state also increases the gas tax to 46 cents per gallon.
Morgan is advocating for a lower per-mile fee. He said these efficient vehicles should be charged the same rate as gas drivers who get 30 MPG.
“The national average for all vehicle types is closer to 25 MPG, with Oregon in particular trending closer to 30 MPG,” he said. “When you take into consideration more recent data, it more clearly indicates the average MPG of vehicles on the road is much higher than 20 and so if you are to rely on that 20 MPG average assumption, you’re effectively overcharging EV drivers based on past data.”
Charging these drivers of these efficient vehicles at a per-mile rate equivalent to what 20 MPG vehicles pay in gas taxes would increase revenue for the state, Morgan said. But, he said, that would cut into the savings the drivers who made the switch to EVs may be counting on.
“Especially those that are driving further, those that are potentially more dependent on those savings because they’ve made choices, like buying an EV, to make those cost savings happen,” he said.
Plug-in hybrid drivers could also face higher prices than EV drivers, Morgan said. That’s because it’s harder to track which miles are driven using just the electric power of the car. Plug-in hybrid cars are very fuel-efficient and use a blend of electric and gas.
According to ODOT’s Boardman, if Kotek’s proposal passes, the agency will have three years to develop a plan to properly charge users of these vehicles.
But a road usage charge could convince people not to buy or lease EVs, especially at a time when the Trump administration is ending federal EV tax credits. Oregon is also running out of funding for rebates. Since July, the state has issued more than $104 million in EV rebates and has announced it will be temporarily suspending one of its rebates next month due to lack of funding.
Public hearing
On Monday, legislators held the first public hearing for Kotek’s proposed bill. Hundreds of people submitted testimony, including Marie Dodds, the director of government and public affairs at AAA Oregon/Idaho. She said her group supports the overall proposal but she did not provide specific comments about the road usage charge.
“We believe the package reflects the core values that AAA uses to evaluate any transportation funding package, including commitment to traffic safety, protecting the transportation trust fund, ensuring cost responsibility between light and heavy vehicles and accountability and transparency,” she said during the hearing. “Although this package is not perfect, we do believe it takes steps needed to provide the stability, accountability, and measured solutions necessary to keep Oregon moving and efficiently.”
But public support for the road use charge appears limited. Many who testified said they opposed the additional tax on EV and plug-in hybrid drivers.
“This is a regressive tax for all Oregonians, but especially those of us who spent more money to buy EVs or Hybrids to protect our environment,” Ellen Pfander said in her written testimony. “First, we receive a tax break for buying an EV/Hybrid and now we are getting taxed for owning and driving them?!!! I guess I’ll trade it in and buy a huge polluting truck!!! Come up with something that is fair for our environment.”
Others noted the high number of vehicles in the Portland metro area with Washington license plates. Those cars will not pay road use charges for the miles they drive on Oregon’s roads.
“Living in North Portland, I see hundreds if not thousands of Washington vehicles in Portland every day they come from Vancouver to work and shop to avoid paying state taxes,” Maria Belgrave said in written testimony. “Those vehicles cause wear and tear on … our streets and highways. If there was a toll fee to come into the state this would generate the much needed funding to ODOT.”
Others testimony criticized the proposal to charge EVs based on the 20 MPG rate, calling it unfair.
Morgan, the Climate Solutions transportation expert, said charging EVs as much for their road use as drivers of 30 MPG cars pay in gas taxes would be more fair — and would reflect the reality that vehicles in Oregon are becoming more energy efficient. He said if lawmakers make that change, and also develop a strategy to implement the program for plug-in hybrid drivers, a road usage charge could work.
“The [road usage charge] is a really good ‘user pays’ model,” Morgan said. “But if we start out by just penalizing EVs, we’re sending all the wrong signals about what we should be doing as a state.”
This story comes to you from the Northwest News Network, a collaboration between public media organizations in Oregon and Washington.