Oregon’s Weight-Mile Tax to Increase Oct. 1 by an Average of 24.5%

This story appears in the Sept. 27 print edition of Transport Topics.

Oregon’s truck weight-mile tax is set to increase Oct. 1 by an average of 24.5%, along with the flat fees some truckers pay.

The higher taxes are part of an overall state transportation funding plan agreed to last year by legislators in consultation with the trucking industry, which has opposed the weight-mile tax since Oregon adopted it in 1947.

“We would get rid of it in an instant if we had the opportunity,” said Bob Russell, vice president of government affairs for Oregon Trucking Associations.

However, the industry backed the state’s efforts last year to create a badly needed road funding plan, Russell said.

“We make our living on the highways; if we don’t invest on the highways, it eats us up on other costs,” he said.

“Pretty irritating,” is the nicest thing truck company owner Dennis Radford had to say about the pending increase.

His Radford Trucking Co., Baker City, Ore., hauls mostly logs and wood chips, meaning that, loaded, Radford trucks can legally weigh as much as 105,000 pounds.

“That’s going to get us close to 25 cents a mile,” Radford said of the tax increase.

For carriers such as Radford, there is no way to avoid the nearly 25% increase in state taxes.

For log, wood chip and some other heavy haulers, the state offers a monthly flat fee as an alternative to the weight-mile tax. But those fees also are going up on Oct. 1, and in past years, Radford said, the flat fee schedule has not offered him any relief.

“They’re pretty smart,” he said of Oregon’s tax law authors. “They usually have that to where it doesn’t really fit anybody.”

The flat monthly fee for haulers such as Radford will rise to $6.33 per 1,000 pounds, up from the current $5.08 per 1,000 pounds.

Meanwhile, according to the tax schedule published by the Oregon Department of Transportation, with the increase in the weight-mile tax, a 5-axle truck weighing 80,000 pounds loaded will pay 16.92 cents a mile, or $169.20 to run 1,000 miles. Currently, the same truck running the same 1,000 miles pays only 13.16 cents a mile, or $131.60 total.

The state’s decision to create a new funding plan put the trucking industry in a “Catch-22 situation,” said Mark Gibson, past OTA chairman and owner of Siskiyou Transportation Inc., Ashland, Ore.

“We felt that if we didn’t support anything, and we just flat said, ‘No, we want no new transportation taxes, period,’ we would have had no say” on the plan or on how the money would be spent, Gibson said.

The new transportation plan, which included higher fuel taxes along with higher registration fees for cars, will generate $300 million in revenue per year for the state highway fund, the state DOT said.

A list of specific improvement projects was adopted along with the funding plan, and those improvements are slated for routes that “enhance freight mobility,” Gibson said.

Its weight-mile tax, however, makes Oregon the most expensive state in the country for trucking, Russell said, even though trucks weighing more than 26,000 pounds do not have to pay state fuel taxes.

Under the plan, fuel taxes are scheduled to rise to 30 cents a gallon from 24 cents for both diesel and gasoline on Jan. 1.

To illustrate how much more the weight-mile tax costs trucking compared with a diesel tax, Russell said Oregon would need a diesel tax topping $1 a gallon to generate revenue equivalent to the 16.92-cent-a-mile tax on an 80,000-pound, 5-axle truck.

That’s assuming the truck got 6 miles to a gallon of diesel, and Radford said his log carriers get about 4.5 miles a gallon, which is why he expects to have to pay about 25 cents a mile under the new tax schedule.

To help offset the cost of the weight-mile tax increase, Russell said, the trucking industry persuaded legislators to delay the increase a year.

“We delayed the implementation of the tax increases in light of the economy,” he said. “We just didn’t delay [it] long enough.”

Without the delay, he added, the weight-mile and flat fee increases would have gone into effect Jan. 1, the same time automobile owners had to start paying higher registration fees.

To further offset the effect of higher weight-mile taxes, Russell said, legislators imposed a four-year moratorium that keeps local governments from imposing new fees or taxes on truckers.

The weight-mile tax is paid by about 21,500 carriers, 13,000 of which are out-of-state firms, according to figures supplied by ODOT’s Motor Carrier Transportation Division.