This page is being updated to reflect our current funding crisis and associated layoffs and service reductions. For the most recent information, please consult
Governor Kotek's press release on this issue and these regularly updated frequently asked questions.
Sufficient and Sustainable Funding for Oregon’s Transportation System
Maintaining Oregon’s transportation system is something most people can agree the government should do. People walking, driving, biking and rolling value smooth roads, safe ways to cross the street, snow clearing in winter, highways free of trash and graffiti, and excellent customer service. But ODOT is laying off hundreds of employees and dramatically reducing service. Why is that?
The state relies on gas tax receipts combined with fees on vehicles and freight haulers to form the State Highway Fund, which then distributes money to transportation agencies across the state. While this structure has supported the state’s transportation system for a long time, the State Highway Fund can no longer support the maintenance, operation, and safety of our system, and of ODOT, into the future. This is due to three main causes:
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Flattening gas tax revenue: Oregonians are driving increasingly fuel-efficient vehicles and switching to electric vehicles at a high rate – this is good as it will drive carbon emissions from transportation down 60% over the next 25 years. But with increased fuel efficiency and more EVs, Oregon sees lower tax revenues and less money available to maintain the transportation system.
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High inflation: Inflation has made maintaining the transportation system more expensive. The materials and staffing necessary to provide the services Oregonians rely on have gone up dramatically in cost. Unlike many other states, Oregon’s gas tax is static and isn’t tied to inflation. Our vehicle and freight hauler fees are also not tied to inflation. With every year that passes, the same dollar purchases fewer materials and less service.
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Restrictions on available funding: Only a small share of the funding that comes into ODOT can be used to maintain the state’s transportation system and run the agency. State law directs almost half of total state highway fund dollars to cities and counties and then dedicates over half of what’s left to pay back bonds for past projects and invest in new projects, leaving only about 20% of every dollar available for state highway maintenance.
Tough Road Ahead for Travelers
ODOT is forced to take deep cuts, including laying off hundreds of employees and scaling back essential services like road maintenance, snow removal and safety operations. Without new revenue or more revenue flexibility, we do not have the ability to address this funding crisis without layoffs.
Oregonians can expect longer road closures, more trash and graffiti, worse winter driving conditions, more potholes, and slower DMV customer service because of this structural revenue issue. The decline in Oregon’s transportation system won’t be limited to state highways because counties and cities rely on the state highway fund for their maintenance services too. State, local, and neighborhood roads, sidewalks and bike lanes will all decline.
Road Map to Sustainably Fund Oregon’s Transportation System
Sufficient, sustainable, and resilient funding is key to maintaining and modernizing our state’s transportation system. Other states choose a variety of ways to sustainably fund a modern transportation system such as raising or indexing transportation fees to inflation, establishing new user fees like a road usage charge or tolls, or transfers from the general fund.
There are several options for sustainable funding.