Oregon May Revive Diesel Tax Plan

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An Oregon lawmaker vowed to revive an attempt to replace the state's weight-mile tax with a diesel fuel charge.

Sen. Marylin Shannon said she would amend the gasoline tax bill now in the Senate to reintroduce the trucking industry's plan for a diesel fuel tax, a proposal rejected by the House Revenue Committee (5-24 p. 3).

As it stands now, the gasoline tax bill would dramatically increase some trucks' weight-mile taxes. Truckers' weight-mile charges are tied to other user fees, so a gasoline tax increase would automatically push up weight-mile taxes too.

But the current bill recalculates tax rates even further, resulting in discounts for some and increases above 100% for others. The lightest and the heaviest trucks would see the greatest increases due to a cost allocation study that suggested those vehicles weren't paying their fair share, said Robert E. Russell, the association's director of government affairs.

"It results in huge shifts of the tax burden within the industry, and that's just unconscionable when you start playing with markets that way," said Russell.

"It's a horrible increase if we go with the gas tax without repealing the weight-mile," said Shannon, chairwoman of the Senate Transportation Committee. "For many truckers, it's 50% or more, and it would especially hit small in-state companies."

Shannon said the solution is to get rid of the weight-mile tax altogether and replace it with a simpler diesel tax.

"The weight-mile tax is so inefficient it costs our state twice as much to collect half as little," she said.

Shannon said she thinks enough support exists in the state Senate for the diesel tax. She also said that Rep. Ken Strobeck, chairman of the House Revenue Committee, has told her that if the Senate approves it, he will get his committee to sign on too.

"The chair of the Revenue Committee has already said to me that he will pass out what we do if we'll do the heavy lifting," said Shannon. "So, we're there. I'm sure we'll have enough votes for the repeal."