If you work for a living, you’re likely to see your paycheck go down a bit with your first payment in July. You can thank the 2017 Oregon Legislature for that.
A new statewide payroll tax goes into effect July 1 as part of a massive, $5.3 billion package of transportation fees and taxes, the proceeds of which will finance everything from congestion-reducing projects to mass transit.
The payroll tax, 0.1 percent of a worker’s gross wages, will cost an Oregonian making $45,000 per year roughly $45, or about $1.88 each two-week pay period. But wait; there’s more.
Gas taxes have already gone up by 4 cents a gallon, and will increase more in the years ahead. Like the increase in registration fees they generally must be spent on roadways and roadside rest areas.
Too, lawmakers imposed an 0.5 percent sales tax on the purchase of new vehicles. Kelley Blue Book says the average American model car this year costs roughly $40,000, and the tax would add $200 to that price tag. Bicyclists don’t escape, either. They’re paying a $15 “privilege” tax on bikes that cost $200 or more. Those taxes will be used for a variety of transportation-related things.
The payroll taxes will help fund public transportation in the state. For smaller counties that means about $50,000 that, presumably, will be used to beef up their services for the elderly and disabled. Too, in the first year Oregon’s eight Indian tribes will receive $50,000 each. Deschutes County is expected to collect more than $1 million in the first year of the payroll tax and more than double that in fiscal year 2020. Jefferson and Crook counties will get somewhat less.
The new taxes may ease the pressure for local communities to find money for road and transportation projects, but they won’t eliminate it. Cascades East Transit, which provides mass transit throughout the region, will continue to need local funding and may have to ask for local support to increase that funding in the future.
When that time comes, people should remember these new taxes.