Committee forwards HCR 42 signaling intent to offset certain transportation tax increases if new revenue sources materialize; debate highlights funding and uses

The House Committee on Rules voted on June 24, 2025 to advance House Concurrent Resolution 42 to the House floor with a recommendation that it be adopted. The resolution, as presented by committee staff member Melissa, states that "when new funding sources, including but not limited to a cap and invest program, are enacted and operative, it is the intent of the Legislative Assembly to reduce or phase out the increases to the privilege tax and privilege use tax, the increase to the tax on wages for transit, and the transfer tax and transfer use tax imposed under" the statutes cited in the resolution.

The committee’s discussion focused on what the resolution’s language signals about future revenue use and on clarifying which taxes are eligible for state highway fund uses. Vice Chair Draisen said he could not support the resolution and described it as premature, asking whether the resolution intends that cap-and-invest revenues would be used to offset transportation tax increases. "Is the language of this resolution telling us that when cap and invest goes into place that they're going to take revenues from cap and invest and redirect them toward transportation needs?" he asked.

Melissa and supporters responded that the resolution is intended as a directional signal, not a binding promise to future legislatures. Melissa read prepared language onto the record: "If we think of this ongoing conversation about transportation as a road trip, this is the direction we plan to head in, not the destination itself...this HCR is an important signal that implementing cap and invest will not just be additive to our investments in transportation. It will give us further flexibility to rebalance how we fund our transportation system."

Representative Bossert Davis provided fiscal context and cautioned that the proposal is complex. On the record she said the privilege tax in the current proposal would raise about "$180,000,000 over 10 years," the tax on wages for transit would raise about "$2,980,000,000 over the next 10 years," and the transfer tax would raise about "$2,470,000,000 over the next 10 years." She also emphasized that the privilege tax and the tax on wages for transit are not state highway fund eligible, while the transfer tax is state highway fund eligible. "So when we're using the words perplexing, it does seem strange, like how are they going to distribute the revenue?" she said, and concluded she would vote no.

Representative Bossert Davis further explained that different taxes are constrained differently by existing fund eligibility rules: she said the privilege tax could go to Connect Oregon, electric vehicle incentives, and bicycle and pedestrian projects, while the transfer tax (if adopted) would go to other projects "including wildlife crossings." Another member reiterated that some transportation-related expenditures in practice are not traditionally considered core highway functions.

The motion by Vice Chair Pham to move HCR 42 to the floor with a be-adopted recommendation passed after a roll call. Vice Chair Draisen recorded opposition on procedural grounds and Representative Bossert Davis recorded a no vote; other members split on the roll call as recorded by the clerk during the meeting.

The committee closed the HCR 42 work session after the vote. The resolution’s language is advisory in nature; it signals legislative intent but does not itself appropriate funds or change statutory eligibility rules.