Oregon lawmakers passed a key transportation funding bill this week, averting layoffs at the Oregon Department of Transportation and securing money for road maintenance before winter weather begins.

“Oregonians believe … that having safe, accessible roads is a core function of government,” Gov. Tina Kotek said at a press conference on Monday. “Our highways have to be open. People need to be able to get where they need to go.”

The legislation halts the threatened layoffs of hundreds of ODOT employees that were due to occur if the bill hadn’t passed. ODOT also canceled the closures of 12 maintenance stations around the state.

Overall, the package is expected to boost revenue by $791 million in 2025-27, and $889.9 million in 2027-29, according to a Legislative Revenue Office analysis.

“This funding is a significant investment, and we do not treat it lightly,” ODOT spokesman Kevin Glenn stated in an email on Wednesday. “ODOT will increase efficiency and, with this funding, continue to deliver for Oregonians.”

Republicans criticized the bill, which passed the Senate by an 18-11 margin, as a major tax increase on Oregon drivers. The legislation hikes the costs of several taxes and fees.

“Democrats chose the easy path: tax more, spend more and ignore the consequences,” Rep. Virgle Osborne, R-Roseburg, stated.

Passenger vehicle registration fees will nearly double from $43 annually to $85. Title fees will jump from $77 to $216.

Payroll taxes will double to 0.02 percent, effective Jan. 1. That’s expected to raise $196.6 million during the next biennium.

The bill also:

• directs the Secretary of State to conduct biennial audits of ODOT’s capital projects and use of state highway funds, and
• gives the governor, rather than the state Transportation Commission, the power to appoint and fire the ODOT director.

The legislation does not fund any of the state’s major capital projects such as the $2.1 billion Interstate 5 Rose Quarter Improvement Project, which faces a massive funding shortfall in part due to federal cuts.

“This package doesn’t solve all of the issues we see going forward, so we’re hopeful for more conversation leading to a comprehensive solution later,” said Kirsten Adams, lobbyist for the Associated General Contractors’ Oregon-Columbia chapter.

Transportation funding was delayed when legislators could not agree on a package during this year’s regular session that ended June 27. Kotek called a special session to begin on Aug. 29, but legislative action was delayed due to the lack of a quorum.

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The Oregon Legislature‘s upcoming special session focusing on transportation funding may deal a major setback for tolling in the state — except for the Interstate Bridge replacement project.

Gov. Tina Kotek on Wednesday called for repealing a 2017 law that provides the framework for tolling on interstates 5 and 205.

Key state lawmakers, including Sen. Mark Meek, D-Gladstone, have urged the repeal of the law as part of anticipated legislation to fund the Oregon Department of Transportation.

“There will be language in the bill to repeal ORS 383.150,” Kotek said in remarks to reporters, in reference to the 2017 tolling law.

Kotek acknowledged that the idea of tolling Oregon drivers had not shifted out of park.

“We are in a pause across the system on tolling, outside of the Interstate Bridge,” she said.

Kotek’s comments were part of a broader outline of plans for the special session set to begin Aug. 29. On Tuesday, the governor said she would invoke her authority to reconvene the Legislature for the session.

The effort comes after the Legislature failed to pass a transportation funding bill in the regular session that ended June 27.

Kotek said Wednesday that she wants to keep the special session tightly focused on funding ODOT’s regular operations. Funding for the state’s infrastructure mega-projects is not expected to come out of the special session, Kotek said

The governor urged action, saying it’s needed to avoid layoffs at ODOT. The agency has already notified 483 workers of impending layoffs without forthcoming funding. Additional layoffs would follow early in 2026.

“These dollars will cover the ODOT budget to provide basic services for Oregonians and prevent layoffs of workers that provide basic services to Oregonians,” Kotek said.

Kotek gave the broad framework of a transportation funding bill but did not say how much it would cost. Among the bill’s elements:

• The state’s gas tax would rise 6 cents, from 40 cents to 46 cents per gallon.

• A $30 electric vehicle fee would be implemented.

• Vehicle registration and title fees would also rise.

• The payroll tax to pay for transit would double from 0.1 percent to 0.2 percent. Kotek said the increase is necessary to keep rural transit systems alive.

• The governor would have greater ability to fire the ODOT director. A 2017 transportation bill gave the Oregon Transportation Commission more authority over ODOT’s executive.

Kotek said she wouldn’t dwell on the transportation bill’s failure during this year’s regular session. She added that Oregon should consider funding transportation more often, on an annual or biennial basis, rather than in bigger cycles.

While Clackamas County lawmakers and others are likely to welcome a major setback for tolling, an industry official questioned how Oregon will pay for its major infrastructure projects without those revenues.

“It’s concerning to move away from any tolling, especially when tolling was how those projects were going to pencil out,” said Kirsten Adams, a lobbyist for the Associated General Contractors‘ Oregon-Columbia chapter.

Meek said it’s “great news” that Kotek will push to repeal the 2017 law. He added that he’d be open to tolling in the future to pay for the state’s mega-projects.

“I think there is room for tolling for the metro area to help pay for our mega-projects. I just want there to be a more open conversation about it,” he said.

Meek said he envisioned a London-style tolling area, where drivers would be tolled coming into the Portland-metro area from Hood River in the east, U.S. Route 26 from the Oregon Coast in the west, Interstate 5 near Aurora in the south and the Glenn L. Jackson Memorial Bridge (Interstate 205) at the Washington state border in the north.

Adams praised Kotek’s bid to seek greater accountability from ODOT leaders, and added that Oregon needs a better way of paying for mega-projects.

“We’re looking for a long-term funding solution for those bigger projects, knowing that’s important for the infrastructure in our state, the mobility in our state, and knowing they’re really expensive,” she said.

Kotek told journalists she has the votes to pass a transportation package, and that she is not concerned that a potential walkout by Republicans would deprive the Legislature of a quorum. Meek agreed.

“She would not have called this if she did not have a quorum and the votes to pass,” he said.

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