By Taylor W. Anderson

The Bulletin

SALEM — Last-ditch efforts to appease both Democrats and Republicans and find a path to the first major transportation package passed in the Oregon Legislature since 2009 was thrown by the wayside Thursday when Gov. Kate Brown announced there was no way forward.

“Given the complexity of the issues and the remaining time available, there simply isn’t a path forward through both chambers for a proposal that accomplishes both this session,” Brown said in a statement.

Lawmakers had worked for months behind closed doors to try to repeal Oregon’s newly passed low-carbon fuel standard, which seeks to reduce 10 percent of greenhouse gas emissions from fuel and spur a green energy market, and replace it with different efforts to reduce carbon emissions. In exchange, lawmakers would have tried to pass a package of tax and fee increases that would pay for upgrades to bridges, roads and transit projects across Oregon.

Despite months of negotiations, mostly in private, and an apparent agreement in the Senate over the scope and size of a transportation package, Brown and other lawmakers abruptly announced Thursday the deal was off.

“I’m just so sorry that we couldn’t get there,” said Senate President Peter Courtney, D-Salem, when announcing news of the failed package to the Senate. “It is over now for this session.”

Republicans said since February they would not vote for a bill that increases gas taxes and fees charged by the Department of Transportation if Democrats kept in place the low-carbon fuel standard, which the state estimates would increase the cost of fuel by up to 19 cents per gallon.

The program was originally created in 2009, but was scheduled to sunset this year. Democrats lifted that sunset quickly at the start of the session, queuing up the fight over transportation and the low-carbon fuel standard that apparently ended for the time being Thursday.

Sen. Jeff Kruse, R-Roseburg, said while the months of work on the package won’t go away, he doesn’t see how any package can make it through before the 2016 elections.

“We got what we’ve got. I’m not going to go start a bonfire and burn everything,” Kruse said. “The appetite of the legislative assembly to be looking at a package with a tax increase next session, so close to an election, is probably not very real.”

It looked like a compromise was possible this session after a bipartisan group of senators agreed on a framework that would repeal the new standard, raise the gas tax 4 cents per gallon and approve a nearly $400 million bonding package to widen highways, improve bridges and send $103 million to cities and counties annually for road funding. The Bend-Redmond Safety Corridor would have received $20 million from bonding money had the deal gone through.

A compromise proposal sought to cut at least as much — perhaps more — carbon emissions through methods such as improving transit projects, subsidizing electric vehicle charging stations and creating new blending programs.

But a dagger came when Department of Transportation Director Matthew Garrett told a committee hearing that the projected carbon reductions ODOT gave to a work group creating the package were wrong. The new numbers, Garrett said, would actually result in a carbon-reduction program that was less than those in the low-carbon fuel standard.

Aside from the error, it had been clear that the prospects of pushing the repeal-and-replace proposal through the Democratic-controlled House would be difficult.

Earlier this month, 19 House Democrats sent a letter to Brown saying they wouldn’t vote for a transportation package that included a repeal of the low-carbon fuel standard, which was a priority of environmental groups.

Lawmakers were also working under a tight timeline to create and refine a massive package, which would have raised the money through bonding and another $343.5 million through gas-tax and fee increases. The Legislature must finish its work no later than July 11.

Sen. Doug Whitsett, R-Klamath Falls, said lawmakers put in the proposal incentives the group hoped would spur development of propane fueling terminals for cars running on propane, which produce less greenhouse gas emissions.

The proposal also used the idea piloted by Bend-La Pine Schools, which in recent years converted 53 Blue Bird buses to propane, cutting fuel costs by more than half and eliminating 169,000 pounds of carbon dioxide emissions from each bus, according to a study by Roush CleanTech of the district’s program.

“Part of this bill would have put some money aside to help school districts retrofit buses,” Whitsett said. “But it (also) would have helped subsidize creation of private-sector fueling stations for compressed natural gas.”

Brown and environmental groups are now working to decouple the low-carbon fuel standard from the transportation package, after working for months on a solution with the two tied tightly together.

“They should be decoupled and considered separately, thus avoiding the ‘my way, or no highway’ situation in which we now find ourselves,” Brown’s statement read.

In a written statement, Doug Moore, executive director of the Oregon League of Conservation Voters, said, “This whole debacle lived and died on the oil industry’s meddling. Big Oil tried to rewrite the clean fuels program in a ‘my way or no highway’ gambit. In so doing Big Oil killed the chance for a transportation package this session.”

House Minority Leader Mike McLane, R-Powell Butte, pinned the transportation package failure on Democrats.

“Unfortunately, with today’s decision to kill the transportation package, Democrats have left Oregonians with a hidden gas tax and no infrastructure improvements,” McLane said.

At this point, the low-carbon fuel standard still faces a threat of repeal at the ballot box, as oil companies have already taken steps to take the question of a repeal to the voters in 2016.

— Reporter: 406-589-4347,

tanderson@bendbulletin.com

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