Make the McKenzie Connection!

America's first gas tax made Oregon a motorist's paradise

When Hasso Hering, the legendary longtime editor of the Albany Democrat-Herald, first came to Oregon in the mid-1960s, one of the things that struck him was the quality of the roads.

“All the roads were wide and smooth and well built,” he said (or words to that effect; I don’t remember verbatim). “There were no potholes. You could go all day. You could drive your Mustang as fast as you wanted, and nobody would bother you. I’d never seen anything like it.”

Oregonians of a certain age will know what Hering was talking about, although they may have been less gobsmacked by the quality of midcentury Oregon roads since they grew up with them. (Hering is from Cologne, Germany, originally, and still speaks with a noticeable and rather charming trace of a Rhenish accent.)

Today, as travelers outside the Beaver State’s borders know well, Oregon’s roads are merely average, or maybe slightly above average, in terms of crowdedness and quality. Certainly, other states tend to have more and wider interstate freeways.

But you don’t have to go too far back into the past to find a time when Oregon’s highway system was something rather special.

It’s a legacy that goes back to the dawn of motoring; when the Good Roads movement got started, it really took off in Oregon, starting in the early 1910s with the nationally famous Columbia Gorge Highway.

But the true reason for the lion’s share of credit for Oregon’s transformation into a midcentury motorist’s paradise is much more prosaic:

Our state was the first in the nation to levy a gasoline tax to fund its highway system.

The gasoline tax was born in a law office in Forest Grove belonging to Loyal M. Graham, a member of the state House of Representatives. Graham’s good friend and fellow House member W.B. Dennis, who lived in Carlton and represented Yamhill County, had stopped by on a trip to Portland, to visit and talk a little shop. Both men were members of the House Highway Committee, and both were well aware that the committee had a big problem on its hands.

The problem, of course, was money. Isn’t it always?

The state House had created the Highway Department in 1917. They had financed it with a $6 million bond measure to be repaid with property taxes. Voters had approved this bond measure, but not without some grumbling. It was clear that the path to a proper highway system would be a struggle if they had to do it that way. At the time, of course, cars were still uncommon enough to frighten livestock. Everyday Oregonians were willing to spend a little to make the roads better for everyone, but clearly, they would draw the line at spending vast sums to make the state a paradise for rich motorists.

And those sums would indeed have to be vast. The $6 million was turning out to be a drop in the bucket of what was needed to set the state up with a proper highway system.

With Graham and Dennis on board, two more bond measures were shepherded through in 1918 for $10 million each, with the stipulation that they’d be paid with highway tolls and fines, not property taxes. But obviously, that was a limited source of money.

And there was another, bigger problem: There was no provision for maintenance.

Building roads was plenty expensive, but maintaining them was also not cheap. There was no revenue flowing steadily to keep them maintained, and capital bond levies obviously couldn’t be used for maintenance. Something else was needed.

And that was the situation on that day in the fall of 1918 when Rep. Dennis turned to Rep. Graham and said, “Well … couldn’t we levy a tax on gasoline?”

They started out with a penny a gallon, having no real idea how much it would generate. As it turned out, it generated a lot more than they’d anticipated.

It also turned out to be a remarkably frictionless way to get tax money; it was almost painless. Nobody paid it unless they bought gasoline; it was baked into the price of the petrol (collected by the wholesalers) so nobody ever saw the money going out. It also literally saved people money: Potholes and mud-bog roads damaged cars. Motorists were happy to pay a few dozen dollars a year for roads when the alternative was hundreds of dollars in car repairs and hundreds of hours stuck by the roadside, or nursing a broken automobile back to civilization. The gas tax was as close to win-win as taxation gets.

In 1923, thanks to the gas tax, Oregon became the first state west of the Mississippi to build a paved highway from one of its borders all the way to the other — Highway 99, all 347 miles of it, completed in 1923.

In 1955, Oregon built its first freeway, again courtesy of the gas tax — a year before President Eisenhower signed the legislation getting America’s interstate freeway system started. That was the Banfield Freeway, in Portland, named after a legendary state highway commissioner and now part of Interstate 84.

For all that early work, the interstates took a while to get really popular in Oregon — something you might not believe if you’ve been stuck on I-5 lately. At quitting time on a weekday, anywhere in the Willamette Valley, the freeway is usually bumper-to-bumper.

But it wasn’t always like this. In fact, when Bill Bowerman was coaching the University of Oregon track team in the late 1960s, his runners would use the then-newish freeway for practice. They’d run onto the freeway at the north Springfield exit and run to Coburg and back, running in the fast lane going against the flow of traffic — such as there was. On any given day they’d only see a car or two, and they’d see it coming from a long way off, in plenty of time to get into the median to safety.

Many longtime residents also remember times, driving between Eugene and Salem for instance, when they were virtually alone, hurtling along, kings of the highway. Those days are gone in the valley, although a trip from The Dalles to Pendleton on I-84 can get pretty lonely sometimes.

For younger residents, the freeways seem like part of the landscape: always been here, always will be. But Oregon’s freeway system is a relatively young one. Interstate 5 itself was not finished until 1966, just over 50 years ago. Interstate 205, through the east side of the Portland Metro area, is much newer; it was completed in 1982. And the most recent addition to the system, I-82 near Hermiston, was finished in 1988.

It wasn’t all roses, of course. In 1966, Oregon’s highway-building mojo got a little out of hand, when a scheme was dreamed up to run a high-speed highway over the top of the beach, on pilings drilled down into the sand, at Nestucca Spit. This plan fetched up with a sickening thud on the bulwark of public opinion as well as federal law, and a chastened highway department had to back down.

And one just can’t bring up the Oregon Highway Department without at least mentioning the time when they used a half ton of dynamite (purchased with gas tax money, of course!) to blow up an eight-ton dead whale that had washed ashore in Florence. From a public-relations perspective, that went even worse than the Nestucca Spit wheeze, although come to think of it the operation did get rid of the whale. (The part that was left over on the beach was small enough to be simply buried in the sand.)

But other than these few setbacks, the highway department was something Oregonians were generally supportive and proud of over the years.

That’s in spite of the fact that the department raised the gas tax again several more times. By 1952, it was up to 6 cents.

And it’s that level of taxation that yielded the glorious motorist’s-paradise highway conditions that Hasso Hering remembers from the old days.

Today, the gas tax is 40 cents a gallon, which sounds like a big increase until you adjust that 6 cents for inflation. Six cents in 1952 was worth about 70 cents in modern money. And, of course, the average car’s fuel economy has changed pretty drastically since the 1950s as well, so there’s a lot less cash flowing in per mile driven.

So the highway department — which since 1969 has been officially called the Oregon Department of Transportation — no longer has the cash flow to spend promiscuously on big ambitious highway projects like it once did.

(Sources: A letter to the editor of Oregon Historical Quarterly by Loyal M. Graham published in the March 1955 issue; History of State Highways in Oregon, an engineering manual published by ODOT (March 2020 edition);

Finn J.D. John teaches at Oregon State University and writes about odd tidbits of Oregon history. His most recent book, Bad Ideas and Horrible People of Old Oregon, was published by Ouragan House early this year. To contact him or suggest a topic: [email protected] or 541-357-2222.


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