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Transportation Funding


ODOT's budget is about $6 billion over two years. About a third comes from the federal government and the rest from state government. The Oregon State Legislature must approve our budget and most of our funding is directed by law to specific uses and can't be moved around. For example, we face a major shortfall in funding for day-to-day maintenance on our roads—like plowing snow and patching potholes—because almost all new revenue, particularly federal funds, is required by law to be spent on construction projects. Many things impact ODOT's performance and one of the main factors holding us back is a lack of funding.



Costs are increasing as revenue declines

  • Costs for road maintenance have gone up and increased drastically for construction in the last decade.
  • Revenue from the gas tax — which goes into our State Highway Fund — has plateaued and is predicted to decline in the coming years.
  • Major transportation taxes and fees are set at flat rates that don't change with inflation, meaning they buy less and less every year.

We're doing our best with the available resources and seeking new, long-term funding streams for the future. To achieve our goals in the Oregon Transportation Plan, we need significantly more funding than we currently have.

Watch this five-minute video to learn more about these issues. Also visit ODOT's funding webpage.





 


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                                          Update 04/2024


We need sufficient and reliable funding

  • A more diversified funding portfolio, using multiple funding sources, will help ensure funding stability and reliability long term.
  • Any additional funding will need to be indexed to remain sufficient over time. 
    • If Oregon’s gas tax of $0.24 per gallon in 1993 had kept up with inflation to 2023 it would be $0.51 – instead of our actual rate of $0.40 per gallon. That $0.11 is a difference of $250M in annual revenue (in 2023 dollars).
    • 24 states adjust their gas taxes to rising costs.
  • The July 2024 Transportation Funding Needs document, shows the most urgent funding needs for State Highway Fund investments – including core service functions like maintenance and DMV, as well as safety investments needed to address increases in traffic deaths. 






2024-2028 Strategic Actions

2024 - Develop an analysis of long-term funding needs for the transportation system and agency focused on maintenance and agency operations, safety, equity, climate, road preservation and multimodal transportation.  

2024 - Develop revenue options that will provide sufficient and reliable funding by shoring up existing revenue streams and implementing new revenue sources like road usage charging.  

2024 - Work with legislators and partners to engage the public to understand transportation funding and investment, including investment needs, gaps between available revenues and investment needs, challenges and opportunities with revenue sources, and consequences of disinvestment.  

2024 - Identify further budget management strategies that allow ODOT to operate within available resources in the absence of additional funding.

2025 - Continue developing the OreGO road usage charge program in preparation for legislative action.

2026 - Begin collection of tolling revenue to make investments in the transportation system and manage demand. 


2024 Efforts Underway
  • Analyzing long-term funding gaps for various transportation programs.

  • Preparing a menu of transportation revenue options to provide sufficient and reliable funding, including existing and new sources.


  • Developing 2025-2027 Agency Request Budget through the Oregon Transportation Commission, including revenue shortfall packages and restoration policy option packages.
  • Participating in ongoing legislative discussions about transportation funding needs and revenue opportunities.











2024-2028 Strategic Action Plan Outcome Area

Secure Sufficient and Reliable Funding: 

We will restore core services and advance outcomes by securing the funding needed to deliver the transportation system Oregon deserves.  
Measuring Our Success: 
Increase Real Revenue for State Transportation Sources: Revenue totals across major state fund sources.

Maintain a Positive Highway Fund Cash Balance: The ending balance for a given period across a collection of funds within ODOT’s financial system.


Our progress this quarter:
  • Established Strategic Action Plan implementing actions.