May 11, 2016 5:00 PM, EDT

Portland, Ore., City Council Approves Trucks-Only Tax

Round one in Portland, Oregon’s plan to tax only trucks went to Transportation Commissioner Steve Novick as the five-member City Council voted unanimously in favor of his plan on May 11.

Under Novick’s proposal, the tax would add 2.8% to the bills of trucking firms that have a Portland business license. Novick forecasts that taxing trucks will bring in $2.5 million annually over the next four years to repair and maintain Portland’s streets. He said he expects $16 million a year to be raised through a 10-cents-per-gallon gas tax increase that’s on Oregon’s May 17 primary ballot. Trucks already pay a weight-mile tax in Oregon, which doesn’t have a diesel fuel tax.

“Thank you to my City Council colleagues for passing the Heavy Vehicle Use Tax this morning, after extensive collaboration,” Novick tweeted after the 5-0 vote. “This tax will ensure that heavy trucks pay their fair share for the damage they cause to our roads.”

The ordinance reads: "Due to the fact that a relatively small number of businesses account for most of the heavy truck activity and therefore most of the costs associated with heavy trucks, most businesses will pay a relatively small amount. On the flip side, a handful of very large trucking businesses will pay more based on their volume of trucking activity.” 

Oregon Trucking Association President Jana Jarvis was “disappointed but not surprised” by the vote to only tax trucks.

“What we do next remains to be seen,” Jarvis said. “This program focuses on Portland’s city streets, which our trucks use far less than the state’s highway system. If they put a surcharge on the weight-mile tax because you make a delivery or a pickup in Portland with two of your 100 trucks, you would have to pay that on all miles traveled in the state. This whole process is unconstitutional. We will continue to try to find a more viable solution for our members.”

Novick’s plan requires an appeals process that must be instituted by Aug. 1, a month before the tax is slated to begin being levied. If the gas tax hike is rejected by Portland voters, Jarvis said OTA might sue for trucks being singled out to pay to fix the city’s roads. But even if the gas tax hike is approved, OTA might still seek legal action.

Robert Pitcher, vice president of state laws for American Trucking Associations, said Portland’s plan presents serious legal issues.

“This is the only operating tax [proposed] by a city that is solely on trucks,” Pitcher said. “Most glaringly, the tax is not apportioned to the carrier’s business locally. The carrier could do umpteen miles in Oregon and very little business in Portland but still owe the same amount. The next town over could presumably do the same thing, and there would be no end to it. Also, Portland thinks that it can require a business license for any carrier that does a pickup or a delivery in the city. There are a long line of Supreme Court cases that say that it can’t.”