Senate panel reviews 2025–27 Highway Cost Allocation Study; finds light vehicles underpay, heavy vehicles overpay

Senate Committee on Finance and Revenue Chair Meek on Monday convened an informational hearing on the 2025–27 Highway Cost Allocation Study, a constitutionally required biennial analysis of how motor‑vehicle user fees and taxes match the cost of building and maintaining Oregon’s roads.

The study, presented Feb. 17, found that for the 2025–27 biennium light passenger vehicles are estimated to underpay roughly 14% of their proportional share of highway costs while heavy commercial vehicles are estimated to overpay by about 36–37%, according to the study report and testimony from the study team and their consultants.

The HCaS is performed under Oregon’s constitutional cost‑responsibility requirement and related state law. It uses forecasts of revenues, vehicle use and planned expenditures to calculate “equity ratios” — the share of user fees paid by a vehicle class divided by the share of costs allocated to that class. A ratio of 1.0 indicates parity; greater than 1.0 means a class pays more than its share.

Kevin Campbell, representing AAA Oregon Idaho, summarized the study’s purpose: “The highway cost allocation study is designed to assess whether the various classes of road users … are paying their fair share for the construction, maintenance, and preservation of the state's highway system.” Campbell and other payer representatives urged continued refinement of the model and the new “look‑back” analyses that compare past projections to actual revenues and spending.

Jana Jarvis, president and CEO of the Oregon Trucking Association, told the committee the 2021–23 study found heavy vehicles overpaid by about 16%, that the 2023–25 result rose to about 32.5%, and that the 2025–27 results show the imbalance continuing. “For the past three biennium, these studies have shown a growing disproportionality between light and heavy vehicles,” Jarvis said.

Sarah Iannarone, executive director of the Street Trust and the Street Trust Action Fund, noted how project mix and litigation‑driven liabilities affect allocations. “One of the things … is that the vast majority of increase in spending since House Bill 2017 on bike ped infrastructure has been toward ODOT's ADA liability. We have a $1,800,000,000 curb cut liability by virtue of a lawsuit,” Iannarone said, and recommended separating ADA‑related retrofits as a distinct line item in future HCaS work so investments for future multimodal improvements are more clearly visible.

Brian Worley, road program director for the Association of Oregon Counties, emphasized local maintenance needs: counties own and maintain the majority of nonfederal road miles and said operations, maintenance and preservation make up nearly half of county road budgets. “When you own and maintain 32,000 roads, you don't have much choice in maintaining your system,” Worley said, adding that prioritizing preservation reduces long‑term costs.

Carl Ricadonna, state chief economist and chair of the HCaS study review team, described the review team and process and emphasized the study’s focus on two primary buckets — light and heavy vehicles — while noting equity can vary within those buckets. Ricadonna said the 2025 study was submitted to the legislature on schedule.

Matthew Kitchen of Eco Northwest, the consultant that conducted the analysis, explained the model components and the use of the Oregon State University look‑back study to compare projected versus actual revenues and expenditures. Kitchen said projected revenues were close to actuals for the period examined, but actual expenditures — particularly for preservation and some planned pavement, shoulder and bike/ped investments — were notably lower than planned, which affected the equity ratios when actuals were used.

Because the HCaS is forward‑looking and built on forecasts, the consultant and review team recommended refinements in data and project categorization and provided a package of revenue‑neutral adjustments that would reallocate existing user fees to bring the equity ratios into closer alignment without net new revenue. Committee members asked whether the recommended package was mandatory to meet the constitutional requirement; Eco Northwest said the package as presented is intended to be used together to maintain revenue neutrality while correcting proportionality, but other combinations are possible.

Committee members raised several questions for follow up. Multiple members asked how federal funds, local system development charges and non‑user‑fee revenues were treated; staff and consultants explained the HCaS attributes only user fees (and federal funds that are user‑fee‑linked) to vehicle classes, while other federal or general‑fund contributions are not allocated to classes because they are not user fees. Members also asked how project delivery delays and “carry‑over” balances influenced the look‑back comparisons; witnesses said some project slippage is endemic to delivery schedules and the look‑back helps reveal those timing effects.

No formal committee action or vote occurred; the session was informational. Chair Meek and members signaled interest in additional hearings to allow more time for technical questions and to consider legislative options. Committee staff noted the joint transportation committee would hear the study later the same day.

The hearing record included the 2025–27 HCaS report, slides and the look‑back study materials filed with the committee.

Ending: The review team and Eco Northwest left the committee with options for legislators: refine model inputs and project categorization, use the look‑back analyses to improve forecasting, and consider a package of revenue‑neutral adjustments to address the imbalance between light and heavy vehicle cost responsibility; any statutory changes would require legislative action in future revenue deliberations.