The Democratic-controlled Legislature raised the state gas tax and a range of fees last fall as a way to pay for road improvements and plug a hole in the state’s transportation budget. Republicans responded with a petition to repeal the increases, leading to a referendum that will land before voters just as the Iran war is causing the price of gas to skyrocket around the United States.

“It is a hell of a time to be raising gas taxes on people,” said Jeanine Holly, filling up her tank on a recent morning in Portland.

The gas tax repeal on the state’s May 19 primary ballot comes amid widespread disruptions in the oil industry from the war with Iran started by Israel and President Donald Trump. Discontent is high among U.S. consumers across the political spectrum, with the price of gas topping $4.50 a gallon nationally on Friday and averaging about 80 cents more per gallon in Oregon.

The referendum will give voters a chance to weigh in on a hot-button issue hitting them directly in the pocketbook at a time when prices remain elevated for everything from housing to groceries. Nationally, Democrats have focused on the affordability concerns similar to those that helped propel Trump to victory in 2024. Some of their candidates have even proposed ways to cut taxes as a way to promote their agenda and counter a traditional GOP strategy.

“It’s difficult to imagine a worse situation for … a gas tax increase than right now in American politics,” said Chris Koski, professor of political science and environmental studies at Portland’s Reed College.

Republicans sense an opportunity

Republicans wasted no time in appealing to voters after the Legislature and Democratic governor signed off on the tax increase, which also included a higher payroll tax for transit projects and a boost in vehicle registration and title fees.

They needed 78,000 voter signatures to qualify the referendum for the ballot. They quickly got 250,000.

“That is a remarkable number,” said Republican strategist Rebecca Tweed.

Republicans in Oregon have countered Democrats’ affordability messaging by portraying the tax and fee increases as further fueling the high cost of living.

“Do Oregonians want to pay more? The answer is no,” said GOP state Sen. Bruce Starr, who helped lead the referendum campaign. “Everything they’re looking at is expensive.”

Under the legislation, Oregon’s gas tax would rise from 40 cents to 46 cents a gallon. That would make it tied with Maryland for the eighth highest gas tax of any state when factoring in other state taxes and fees, according to figures from the U.S. Energy Information Administration.

At the Portland gas station, Michael Burch said he used to spend $70 to fill three-quarters of his pickup truck’s tank, but now pays $80 for just over half a tank.

“I’m sick and tired of taxes,” the 76-year-old retiree said. “Gas is certainly dampening the spirits and the coffers of folks that aren’t as well off.”

Hannah Coe, a 30-year-old student, said she was not sure how she would vote on the primary ballot referendum.

“I think I would be in favor of it if it was going to go to the things that it was saying it was going to go to, such as fixing our roads,” she said. “I also kind of feel like that’s just a grab at trying to get more money from the people who live here.”

Democrats blame the Iran war

Oregon Democrats spent much of last year fighting to pass a transportation funding bill to help raise money for services such as road paving and snow plowing. The debate came amid projections of declining gas tax revenue as more people adopt electric, hybrid and fuel-efficient cars.

They finally passed a narrower version of their plan during a special session called by Democratic Gov. Tina Kotek.

She recently acknowledged the challenging timing of the referendum.

“Certainly, the conversation at the ballot this year … is a tough sell right now, because I think everyone is feeling a pinch on their household budgets,” she told reporters.

But she and other Democrats said the root cause of the spike in gas prices is Trump’s decision to go to war with Iran. She suggested the federal government consider reducing the federal 18 cent-a-gallon gas tax if it wants to provide relief at the pump for Americans.

Some Oregonians are receptive to the Democrats’ reason for passing the legislation last year. Kurt Borneman, 68, said he would support the gas tax increase, even though he’s now paying at least $10 more to fill up his tank.

“I realize that money’s tight and roads need to be improved,” he said at the Portland gas station. “I want less government, but I also want nice roads.”

Democratic state Rep. Paul Evans said his party lost the battle over how to frame the gas tax increase to the public. So far, there has been no organized effort from Democrats and their allies to oppose the ballot referendum.

“When anything is reduced to, ‘Do you want a tax or not?’ Most people are going to say no,” he said. “The messaging got away from us, and it became focused upon the price instead of the value.”