Oregon Moves toward Mandating Per-Mile EV Fees, Expanding on Voluntary Program

September 04, 2025

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(Advanced Clean Tech News) Oregon could possibly mandate per-mile road usage fees for electric and hybrid vehicles, marking a significant shift in how the state funds its transportation system as gas tax revenues decline.

Under a legislative proposal debated in a special session this summer, EV owners would begin paying about 2.3 cents per mile starting in 2027, with plug-in hybrids and other hybrids phased in by mid-2028. Alternatively, drivers could opt for an annual flat fee of $340. The plan would also end the state’s supplemental EV registration surcharges, replacing them with the new mileage-based system.

The move reflects growing pressure on Oregon’s transportation budget, which faces a projected $300 million shortfall due to inflation, rising costs, and declining fuel tax revenues as more efficient and zero-emission vehicles take to the road. Lawmakers are also considering a modest gas tax increase and other fee adjustments as part of a broader funding package.

Oregon is no stranger to mileage-based fees. In 2015, it became the first state to launch a voluntary program, known as OReGO, that allows drivers to pay 2 cents per mile instead of traditional fuel taxes.

Participants in OReGO receive credits for fuel taxes paid and enjoy lower registration fees compared with non-participants. For EV drivers, that can mean reducing a two-year registration fee from $316 to about $86. The program was designed to test whether per-mile fees could serve as a long-term replacement for the state’s gas tax, which has historically funded road and bridge maintenance.

Despite its innovative approach, enrollment in OReGO has remained limited, hovering at around 800 participants statewide. Privacy concerns, technology requirements, and the voluntary nature of the program have kept participation modest, though state officials have used it to refine systems for mileage tracking and fee collection.

The newly proposed system would make per-mile charges mandatory for electric and hybrid vehicles. That represents a fundamental shift from experimentation to statewide policy. READ MORE

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Oregon could join Hawaii in mandating pay-per-mile fees for EV owners as gas tax projections fall (PBS News)
Gov. Tina Kotek’s transportation plan could reshape how Oregonians think about electric vehicles (OPB)
More than 84K drivers could face new pay-per-mile fee (News Nation)

Excerpt from PBS News: Legislators failed earlier this year to approve a transportation funding package. Hundreds of state workers’ jobs are in limbo, and the proposal for a road usage charge for EV drivers was left on the table.

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Oregon’s transportation department says the budget shortfall stems from inflation, projected declines in gas tax revenue and other spending limits. Over the summer, it sent layoff notices to nearly 500 workers and announced plans to close a dozen road maintenance stations.

Democratic Gov. Tina Kotek paused those moves and called the special session to find a solution. Republican lawmakers say the department mismanaging its money is a main issue.

Kotek’s proposal includes an EV road usage charge that is equivalent to 5% of the state’s gas tax. It also includes raising the gas tax by 6 cents to 46 cents per gallon, among other fee increases.

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Oregon’s voluntary program has sought to respond to such concerns by deleting mileage data 30 days after a payment is received, Boardman said. While plug-in GPS devices are an option in the program, transportation officials anticipate moving away from them because they’re more expensive and can be removed, he added.

Still, not everyone has embraced a road usage charge. Arizona voters will decide next year whether to ban state and local governments from implementing a tax or fee based on miles traveled after the measure was referred to the ballot by the Republican-majority Legislature.

Many people don’t realize that “both your vehicle and your cellphone capture immense amounts of data about your personal driving habits already,” said Brett Morgan, Oregon transportation policy director for the nonprofit Climate Solutions.

Morgan added that road usage charges exceeding what drivers of internal combustion engines would pay in gas taxes could dissuade people from buying electric and hybrid cars. Already, federal tax incentives for EVs are set to expire under the tax and spending cut bill recently passed by the GOP-controlled Congress.

“We are definitely supportive of a road usage charge that has EVs paying their fair share, but they should not be paying extra or a penalty,” Morgan said. READ MORE

Excerpt from OPB: 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.

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“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.

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On Monday (August 25, 2025), legislators held the first public hearing for Kotek’s proposed bill.

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(Brett) 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. READ MORE