Overview:
The Oregon House of Representatives passed a significant transportation funding package on Monday, Sept. 1, moving the state closer to avoiding massive layoffs and maintaining critical road services across Oregon.
The Oregon House of Representatives passed a significant transportation funding package on Monday, Sept. 1, moving the state closer to avoiding massive layoffs and maintaining critical road services across Oregon.
The bill now heads to the Senate during the ongoing special legislative session. If approved, it would prevent what could be the largest government layoff in Oregon history — 932 jobs that the Oregon Department of Transportation planned to cut without new funding.
House Speaker Julie Fahey felt that the timing was symbolic, with the House vote happening on Labor Day.
“Safe, reliable roads, bridges and transit are what make it possible for workers to get to their jobs, parents to bring their kids to school, seniors to reach medical appointments and small businesses to move goods,” Fahey said in a press release on Sept.1.
Addressing cost concerns
Lawmakers changed the original proposal after hearing from thousands of Oregonians who raised concerns about the cost of living at an Aug. 25 public hearing.
“We have heard those concerns and have made additional changes to the bill to address them,” said House Majority Leader Ben Bowman in a press release on Aug. 31. The newly revised bill eliminates a provision that would have allowed tax increases without legislative approval.
The final package would cost the average driver about $66 per year — or $5.50 monthly — in gas taxes and registration fees. The governor’s plan also includes a small payroll tax increase for transit funding, adding about $3.60 monthly for someone earning $2,000 per month starting in January 2026.
Funding breakdown
The plan would split roughly $300 million in new funding between ODOT (50%), counties (30%) and cities (20%). This represents about a 30% boost from current funding levels for local governments.
ODOT’s share would prevent the planned layoffs and restore some services. Without new funding, the agency plans to start cutting jobs in September, with a second round of cuts in January 2026. The agency would also shut down maintenance facilities statewide.
The department has already tried to close budget gaps by cutting $300 million over five years through efficiency measures, facility consolidations and putting off maintenance work. But that wasn’t enough to cover ongoing operational costs.
ODOT restructuring
The legislation also includes changes to how ODOT operates. It would let the governor directly hire and fire the transportation department’s director, taking that power away from the Oregon Transportation Commission. The bill also requires regular audits by the Secretary of State focusing on major projects and highway fund spending.
Rep. Susan McLain emphasized the real-world impact of the funding decisions in a recent press release. “The roads, bridges, and maintenance services we’re talking about in this bill affect real lives — parents driving their kids to school, seniors getting to appointments, first responders reaching emergencies,” McLain said. “We cannot leave rural Oregon behind. We cannot gamble with safety. We cannot afford to wait.”
The bill would prevent the closure of about a dozen maintenance stations and keep thousands of miles of roads plowed during winter months, according to lawmakers.
Current transportation funding from Oregon’s last major package, House Bill 2017, restricts spending with only 6% available for operations and maintenance. The rest goes toward construction projects and paying off transportation bonds.
The Oregon Senate was expected to vote on the funding package on Wednesday, Sept. 3.
This article appears in the Source September 4, 2025.
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