Exactly one month after they convened to pass a road funding bill, Oregon Democrats finally crossed the finish line Monday.
The state Senate passed a package of tax and fee increases proposed by Gov. Tina Kotek by an 18-11 party-line vote — the bare minimum support to pass a tax increase.
That result relied on the presence of state Sen. Chris Gorsek, a Gresham Democrat who had been unable to make it to the Capitol throughout September. Gorsek was hospitalized last month with complications following a recent surgery. He was pushed into the Senate chamber in a wheelchair to vote Monday, but left the room during lengthy debates over the proposal.
The passage of Kotek’s funding package, House Bill 3991, offers a lifeline to hundreds of employees at the Oregon Department of Transportation threatened with layoffs if the agency didn’t get around $300 million more in the current budget.
But the bill may still have hurdles ahead.
Republicans have said they will work to get tax increases in the bill referred to voters in the November 2026 election. That would require opponents to collect around 78,000 signatures over the next three months, a pricey endeavor that GOP lawmakers suggested Monday would be worth the cost.
“We stand squarely with Oregon taxpayers. The majority does not,” Senate Minority Leader Bruce Starr, R-Dundee, told reporters. “If this gets referred to the ballot, it’ll be on the same ballot that every Democrat that voted for it is going to be on. They’ll have to defend this indefensible act.”
A successful referral campaign would suspend new taxes until a vote is held next year, throwing the fate of ODOT services back into uncertainty. Along with layoffs, the agency has warned it will need to dramatically scale back services like road plowing without more money, making winter roads less safe.
For the time being, Democrats are celebrating the bill’s passage.
“With this legislation, we are averting an immediate transportation safety crisis and doing our part to keep Oregonians safe on the roads,” Senate President Rob Wagner, D-Lake Oswego, said after the bill’s passage.
Among its provisions, HB 3991 will:
- Raise the state’s 40-cent-per-gallon gas tax to 46 cents beginning in January. That change is expected to raise around $90 million per year.
- Hike vehicle title and registration fees that Oregon motorists pay. Registration fees would increase by $42, and titling fees by $139. Electric vehicles, which do not pay gas taxes, would be required to pay an additional $30 on top of existing fees.
- Double the payroll tax that currently takes 0.1% out of workers’ paychecks to support public transit. The increase was initially expected to be ongoing, but Democrats agreed to limit it to two years under pressure from Republicans.
- Require drivers of electric vehicles and hybrids to enroll in the state’s OReGo program, which charges drivers for miles driven. Such a shift is considered necessary for funding road projects as EVs continue to gain popularity and gas tax revenue is expected to decline.
- Require more frequent auditing of the Oregon Department of Transportation so lawmakers have better insight into the progress and cost of major road projects. Those accountability measures are a response to backlash over huge cost increases of ODOT projects.
- Eliminate existing statutory language requiring tolling for some highway projects. That language has caused heartburn for some lawmakers, even though Kotek paused tolling plans last year.
- Simplify the state’s “weight-mile” system of taxing heavy trucks, a change crucial in getting freight interests on board with the bill.
The bill is expected to raise $4.3 billion in new tax revenue in its first decade. That money has been at the center of debate over HB 3991.
Democrats have argued that the state cannot move forward without a tax hike. They have warned of unacceptable service lapses, crumbling roads, and a host of other negative outcomes if Kotek’s bill didn’t pass.
“We’re talking about substantially less money than many Oregonians spend a month on Netflix, all to ensure that we maintain the existing roads, bridges, buses, sidewalks, and highways that get us to work to school and to the doctor’s office,” said state Sen. Khanh Pham, D-Portland. “That’s it. That’s what we’re talking about here.”
“Who built their own road to come here this morning? None of us,” added state Sen. Deb Patterson, D-Salem. “This requires a collective action by us all.”
Republicans have insisted that they don’t want to see the cuts being considered at ODOT. But the party has maintained that there is plenty of money being spent on extraneous purposes that can be rerouted to roads. The GOP has frequently likened the state’s budget to a cash-strapped household trying to prioritize saving for its basic needs.
“When we have a tight constricted budget, we do things that are more important first rather than the things that are less important,” said Starr.
Republican senators argued Monday that their largely rural constituencies — who drive longer distances for basic amenities and often earn less money than people in urban areas — would be disproportionately impacted when filling up the tank and renewing their vehicle’s registration becomes more expensive.
“We’re talking about people who are existing on minimum wage,” said state Sen. Suzanne Weber, R-Tillamook. “I've got one family who right now is collecting pop cans so that they can get a pair of shoes from Goodwill for their daughter to go to the homecoming dance … What is that going to do to those people?”
Republicans again attempted to put forward a proposal Monday that could have steered hundreds of millions of dollars from public transit, bicycle and pedestrian infrastructure, electric vehicle subsidies and more in order to fund roads. In a separate motion, the party tried to get Democrats to agree to refer the bill to voters. Both attempts failed along party lines.
The passage of the tax package caps what has at times been a flailing process by Democrats to find new money for the state’s transportation system.
The party attempted to pass a far larger tax package during this year’s legislative session. It would have raised nearly $12 billion over a decade, and included money for major highway projects, electric vehicle infrastructure and other priorities not contemplated in HB 3991.
But that bill was marred by delay. Democrats didn’t wind up releasing an initial draft until the final weeks of the session, and could not find enough support to move the bill forward before lawmakers adjourned in late June. The timing of that process continued to be a sore point in the Capitol Monday.
“It was a downright misuse of public trust to introduce a bill as large as a transportation funding package in the final weeks of a long session,” said state Sen. Janeen Sollman, a Hillsboro Democrat who voted in favor of the bill. “That whole process did not show good governance and this special session has continued to feel very bumpy.”
Key to HB 3991’s passage was Sen. Mark Meek, the Gladstone Democrat whose opposition to the earlier bill appeared to single-handedly doom its chances. Meek supported HB 3991, he said, because of its smaller price tag and because the bill removed language in the existing statute that could lead to tolls on highways in his district.
“I certainly would never, ever support a transportation package that kept the possibility of tolling in my community alive,” Meek said Monday of tolling on Interstate 205 in particular. “Never.”
Kotek’s office and Republicans say that the possibility of tolling is still alive in statute, contrary to Meek’s remarks.
While the battle over Kotek’s bill has been protracted, it is likely not the last Oregonians will hear about transportation funding. Advocacy groups, local governments and others say that the money from HB 3991 is not enough to sustain the state’s transportation system long term. They also point out that it contains no money for major highway projects that have not been completed despite being major priorities when lawmakers passed a road-funding bill in 2017.
“HB 3991 is a short-term fix that only meets immediate needs for both ODOT and local governments,” the Association of Oregon Counties said in a statement. “Our transportation funding challenges will continue to grow without a comprehensive package that modernizes and diversifies funding streams.”
The Street Trust, which advocates for multimodal safety on state roadways, echoed the sentiment.
“Don’t call it a package — this deal kicks the transportation funding can down the road while leaving the most vulnerable Oregonians behind,” said Sarah Iannarone, the group’s executive director.
