Oregon Gov. Tina Kotek said the Oregon Department of Transportation must live within existing revenue. But what happens if lawmakers don’t step in to address the agency’s impending $200 million budget shortfall?
Major construction projects would stall. Roadway fatalities and serious injuries would increase. Public transit and passenger rail service would be cut, and ODOT would have to shift its maintenance work almost entirely to reactive repairs and emergency responses, according to Susan Peithman, the transportation agency’s climate director.
Peithman presented that scenario to the group of business and transportation experts Gov. Tina Kotek charged with vetting and recommending solutions to the agency’s funding shortfall.
ODOT is facing a fifth budget cycle where it’ll have to cut services and staff unless lawmakers find a way to provide more revenue, or rearrange existing funding — a move Republicans have been pushing for for years that Kotek is finally on board with.
The 12-member group met in Salem Tuesday to discuss what ODOT could accomplish with existing revenue and how much additional funding would be needed to avoid service cuts. The group has until Dec. 15 to send Kotek its recommendations, which must include three investment scenarios, funding options to support them and policy proposals to improve accountability and efficiency within the agency.
Kotek says she’ll take a different approach to transportation funding in 2027
At a press conference last week, Kotek told reporters that her 2027 budget recommendations would require ODOT to operate within its existing revenue.
“Now that’s a trade-off, because that means taking money away from highway projects and other things to pay for basic operations and maintenance. But that’s what you’ll see in my budget,” she told reporters at a press conference Friday.
The position marks a shift from 2025, when she pushed Democratic lawmakers to pass an unpopular transportation package that would have raised $4.3 billion for the agency over the next decade.
In a Republican-led referendum in May, more than 80% of Oregon voters rejected increases to the gas tax, payroll tax and vehicle registration and title fee hikes that would have generated that revenue.
If lawmakers want a different approach, Kotek said, they’ll have to “come to the table” and discuss it.
The consequences of no new funding
A lack of additional funding would affect everything from highway construction and routine maintenance to public transit and passenger rail, according to transportation agency staff’s analyses of several funding scenarios.
On top of accelerating the deterioration of transportation infrastructure, no new funding for the agency would prevent 30 nonhighway infrastructure projects from the Connect Oregon program from moving forward and stall major construction projects.
“Oregon’s multimobile freight system is key to economic development, especially as it relates to national and international trade” said Gale Castillo, a workgroup member and former longtime President of the Hispanic Metropolitan Chamber. “This is where we send freight out and bring freight in and distribute it. Without that, we don’t have access to those markets.”
Cost overruns and lost tolling revenue would also divert money from statewide bridge and seismic preservation projects, Peithman said.
The consequences would extend to routine maintenance, she said. ODOT would have less money to purchase materials and repair roads and other transportation infrastructure, and maintenance would shift almost exclusively to reactive repairs and emergency responses.
That would mean more road closures, rougher roads and slower responses to traffic incidents, Peithman said. Safety would also suffer. Peithman said the agency projects fatalities and serious injuries would increase by 15% over the next decade, while 30% fewer teenagers would receive driver education.
Additionally, about 40% of priority walking and biking routes would remain unfinished. And public transit services statewide would be cut by 20% over the next decade, affecting roughly 94,000 riders who would lose access to public transit.
Those cuts would also hit passenger rail services. Daily service would drop from two round trips to one in 2031, and all passenger rail service would end in 2032, she said.
To cut funding for programs or find new revenue to support all the state’s transportation needs
The workgroup will meet again Nov. 19 to finalize and choose three funding scenarios to present to Kotek in December that would either rearrange the agency’s budget or require new revenue streams.
One scenario the workgroup considered would require the agency to raise $644 million annually, with 73% of that dedicated to maintenance and operations. This scenario does not allocate any funding toward major construction or nonhighway infrastructure projects.
The scenario that would support most of Oregon’s transportation needs — including maintenance and operations, public transit, major projects, safety, nonhighway infrastructure, pedestrian paths and passenger rail —would require the agency to raise $1.38 billion annually. More than 60% of the funding for this scenario would go to operations and maintenance, about a quarter to public transit, 7% to major projects and 4% to nonhighway modes of transportation infrastructure.
