Road Cost Recovery
Road cost recovery is a system to pay for the wear and tear drivers add to Oregon’s roads. Road maintenance is an expensive but critical job. It preserves the roads and bridges we have and keeps them safe for all users.
Declining gas tax revenue
Oregon has relied on a gas tax at the pump to pay for road and bridge maintenance for over 100 years and was the first state to enact a tax on fuel. A small portion of revenue from vehicle registration fees also helps cover road and bridge maintenance costs.
However, each year more people in Oregon buy newer, more fuel-efficient gas vehicles. At the same time, many people are choosing electric vehicles for their next car, truck or SUV. This means drivers are buying less fuel, and that results in less revenue from the gas tax. Revenue from the gas tax is expected to level off and then decline over the next several years. All electric and 40+ mpg passenger vehicles pay higher title and registration fees, but it’s not enough to cover the gas tax revenue shortfall.
This creates a revenue problem for the Oregon Department of Transportation, and county and city transportation agencies. They rely on gas tax revenue to fund road and bridge maintenance. Less money to work with means they must delay critical maintenance work.
A new way to pay for system maintenance
A solution to this problem is “road usage charging.” It’s a system where drivers pay for the miles they drive, not the fuel they use. It ensures every driver pays their fair share for using Oregon’s roads, including electric vehicle drivers.
The Oregon Department of Transportation has a road usage charging program for cars, trucks and SUVs called OReGO. Participants in 2026 pay two cents for each mile they drive. The agency launched a pilot OReGO program in 2015 and a recent law made the program mandatory for many vehicles starting in 2027.
ODOT also runs a similar program with long haul freight trucks called a “weight-mile tax.” It charges fees based on a commercial vehicle’s weight, length and how far it drives in the state. Oregon is one of only a few states with a weight-mile tax.
Another way Oregon could cover the cost of roads is through tolls, which charge a fixed rate for use of a part of the system, like a bridge. Revenue from that toll is used exclusively to cover the cost of that part of the system, per federal law. (See the Congestion Pricing page for more information) Fees and tolls to cover road costs have a long history in Oregon. Bridges across the Columbia River, including the Interstate 5 bridge in Portland, initially had a toll that helped pay for their construction costs.
Road cost recovery can help lower greenhouse gas emissions
The way we collect the revenue to fund our system matters for reaching our climate goals. There are two broad approaches: Users pay per mile driven, or pay up front cost fees like vehicle registration.
Shifting most fees to paying per mile is the most climate-supportive approach. Fees associated with each mile driven provide a clear price signal that can influence how much people drive: If they drive less, they will pay less. Driving less results in less greenhouse gas emissions. Up front cost fees can raise revenue, but they need to be high to cover the cost of road usage and send the same “drive less, pay less” price signal to drivers.
Road cost recovery: Emissions reduction vision
By 2050, Oregon will shift to a road usage charging system that fully covers the cost of maintaining Oregon’s multimodal transportation system.
By 2035, Oregon’s registration fees for cars, trucks and SUVs will vary based on fuel efficiency and social costs like emissions and safety. More efficient vehicles pay lower fees.
By 2035, weight-miles taxes paid by long-haul freight trucks will vary based on fuel efficiency and social costs. More efficient vehicles pay lower fees.
How Oregon is doing
This action is identified as a high risk area that represents reversed progress from previous cycles. Oregon lacks sustainable, long-term funding to maintain our transportation system and low-emission modes. A stronger shift to paying the full cost of road usage provides a price signal for reducing vehicle miles traveled.
OReGO becomes law
The Oregon Legislature passed a law in 2025 that mandated enrollment in OReGO, the state’s road usage charging program, for electric and hybrid vehicles. The Oregon Department of Transportation will phase in OReGO for these vehicles starting in 2027. Oregon is the second state to mandate a road usage fee.
This mandated shift to a climate-friendly, mileage-based pricing system ensures highly efficient gas vehicles and electric vehicles will contribute their fair share to maintaining our multimodal transportation system.
However, the 2025 law did not change the OReGO per mile rates. Additionally, OReGO’s administrative costs are currently higher than the costs associated with collecting gas tax revenue. That means less money for the state to use overall.
Stagnant revenue
Legislators increased state fuel tax rates incrementally between 2017-2024, but they’ve been outstripped by the highest inflation in decades. At the federal level, fuel tax laws and rates haven’t changed in 30 years. Oregon’s cities and counties have also not levied new gas taxes in several years.
As a result, gas tax revenue is not sustainable and will continue to fall short of costs to maintain the multimodal transportation system.
How Oregon can improve
Build on OReGO
If structured well, OReGO and the gas tax can create a future where all drivers pay their fair share and ensure stable, long-term revenue for maintaining Oregon’s transportation system.
Some options for a more robust OReGO program:
Index per mile rates to inflation to ensure they stay in line with rising operating and material costs.
Ensure OReGO is easy for people to participate in. Research suggests that people respond best to a menu of different rates they can choose from. Rates are currently set by the legislature which limits flexibility to apply a more advanced rate structure.
Apply different rates per mile for different vehicles. For example, heavier vehicles pay a higher rate, electric vehicles pay a lower rate.
Create a “block rate” where the cost per mile goes up after the first 5,000 miles driven in the year. This can incentivize people to drive less.
The state legislature can pass laws that give counties and cities more control over their local OReGO rates (for example, congestion pricing in a city center.)
Streamline OReGO enrollment. People could have the option to join at the DMV or a car dealership. They could also pair their OReGO sign-up with enrolling in pay as your drive insurance. (See Other True Costs of Driving page)
Find ways to keep the program efficient. OReGO relies on third party vendors to work, so those vendors need to be responsive and cost conscious.
Incentivize non-driving options. Offer incentives like a “transportation wallet” that helps cover costs of non-driving options, like a transit pass or bicycle purchase rebate.
Add medium-duty vehicles to OReGO
The Oregon Legislature could expand OReGO to include medium-duty vehicles like delivery vans. This will bring them in line with passenger vehicles and long-haul trucks to ensure all vehicle types are paying their fair share by per mile driven, by their weight, or a combination of both.
Plan for future travel technology
Self-driving vehicles are already on the streets of many cities throughout the United States. If self-driving vehicles become more popular on Oregon’s roads, the state could set custom (and higher) road usage charging rates for those vehicles to cover the need for increased road striping, safety and enforcement.