Tax Amendment: BIGGER gas tax hike in 2026

Democrats unveil an amendment with a lower total price tag designed to attract moderate Democrats and Republicans, but a bigger gas tax increase next year. Committee vote this afternoon.

State Rep. Mark Gamba (D-Milwaukie) said Oregonians who oppose tax increases act like “petulant children”

I am writing this edition of The Petulant Child from the DMV waiting room in Bend, funny enough. Today, we look at the much anticipated amendment to HB 2025, who Democrats are trying to pick off to gain enough votes to pass the bill and the crucial, though boring sounding, procedural dynamics that are driving the process.

Dems propose amendment to frontload, scale back gas taxes; Committee vote expected this afternoon

Yesterday afternoon, Democrats unveiled their expected amendment to HB 2025, a likely last ditch attempt to salvage the giant transportation tax bill that has garnered scorn from Republicans and even some Democrats. The Joint Transportation Reinvestment* Committee is scheduled to meet at 3:30 pm today to vote on the amendment.

According to a preliminary Legislstive Revenue Office analysis of the amendment, it would charge Oregonians $11.6 billion more in transportation taxes and fees over the next 10 years. The current version of the bill, which ran into a buzz saw of highly unusual public expressions of opposition from moderate Democrats, would hike taxes and fees by nearly $14.6 billion over 10 years.

The reason for the amendment is to bring skeptical Democrats, and maybe some Republicans, on board the bill. Complicating that effort: the amendment would subject all legislators on the ballot next year (all House members and half the Senate) to an electorate paying a higher state gas tax than they would under the current bill.

This counterintuitive result arises because the amendment increases the state gas tax more next year than the current version (12 cents per gallon vs. 10 cents). Under the amendment, the 12 cent per gallon hike on New Years Day 2026 is the only gas tax increase; the current version increases the gas tax a total of 15 cents but in two phases.

The amendment would also rejigger some of the other tax and fee increases compared to the current bill to deliver the overall reduction in additional taxes and fees.

Report: Mannix among House Republicans considering supporting bill as amended

This morning, I’ve heard from multiple sources close to and within the legislature that a small number of House Republicans, including Rep. Kevin Mannix (R-Salem), are considering supporting HB 2025 if it’s amended as proposed. I have an email in to Mannix asking his position on the bill as amended and will update this story if I hear back from him.

Sources tell me Democrats in the Senate are focused on gaining the support of two members, one from each party. Mark Meek (D-Gladstone) famously expressed opposition to the current version of HB 2025 and was kicked off the transportation committee by Senate President Rob Wagner to clear the way for passage of the current version of the bill. Now, Wagner et al. are in the perhaps uncomfortable position of trying to coax Meek to support the amended bill if it makes it to the Senate floor.

Sources suggest Democrats are also focusing their efforts on Sen. Suzanne Weber (R-Tillamook).

Running out of time

The future of HB 2025 is increasingly tied to the dwindling time Democrats have to get it across the finish line before the legislature must adjourn this Sunday. House and Senate rules require bills to be read aloud on the floor before a vote is taken. With the committee presumably voting to approve the amendment late this afternoon and a lot of work by legislative lawyers to get the amendment incorporated into the bill for floor consideration, the reading requirement alone could gobble up enough time to prevent passage before mindnight Sunday.

Democrats will need Republican votes to suspend the rules in each house to allow a vote without a lengthy reading. In the House, 40 votes are required (there are 36 Democrats); in the Senate, 20 are required (there are 18 Democrats). Legislative sources told me House Republicans struck a deal to supply the necessary GOP votes to suspend the rules in the House, in exchange for Democrats agreeing to kill HB 3067, a gun control bill Republicans oppose. There is no similar deal in play for the Senate, leaving the question whether Democrats have the time to get HB 2025 through both houses.

Regressive progressives?

Governor Tina Kotek recently came out swinging against Multnomah County’s “preschool for all” tax, which is collected from county residents making more than $125,000 per year, according to Willamette Week. There’s a bill in the legislature to stop the county from collecting the tax, which charges 1.5% income tax on income over $125,000 and an additional 1.5% on income over $250,000, with those rates scheduled to go up next year. Meanwhile, Multnomah County is struggling to put together its program, with over $450 million in collected taxes still not used.

Kotek’s position is surprising because it’s a tax and she very much likes taxes, but also because she is opposing a progressive tax (one which applies only to relatively high earners) while supporting HB 2025, the tax and fee increases apply across the board, regardless of income.

From my perspective, preschool for all is bad and HB 2025 is bad, but I’m not the one who calls myself a progressive.

What’s next?

Assuming Democratic leadership wants to move HB 2025 to floor votes, the committee will approve the amendment this afternoon. Then, the House will take it up, subject to the uncertainty about rules suspension I described above. If the bill receives enough votes - which without Republican defections would require all Democrats to vote for it - the bill will go to the Senate. Subject again to the suspension of rules issue, the Senate would then take it up and if it passes before midnight Sunday night, it will go to Kotek for her signature.

Looming over all of this is the question how much pressure Democrats want to put on their moderate and politically vulnerable members. Voting for any tax and fee increases is likely to be unpopular, and it’s doubtful voters will distinguish meaningfully between a $14.6 billion hike versus an $11.6 billion hike. And the amended bill, as discussed above, actually means voters would be paying a higher gas tax when they vote next year than they would under the current version, at which legislative Democrats balked.

In other words, the big question is how much risk of losses in next year’s election are Democrats willing to endure to dramatically increase, again, the amount of Oregonians’ money that flows into Salem?

*To reinvest in something, you had to have disinvested in it. Oregon, as it is wont, has thrown more and more money at transportation.