Interstate Business Solutions, a highway cleanup company that primarily hires formerly incarcerated individuals, veterans and people facing homelessness, laid off 40 of its Oregon employees on Friday.
The Oregon Department of Transportation hired the Indiana-based company in April 2024 to clean litter primarily off the Portland-metro area’s major highways. Its workers have since cleaned 272,000 pounds of garbage — most of which came from homeless encampments — off the highways.
But in addition to having to lay off nearly 500 of its employees to close a more than $300 million shortfall after the legislature failed to pass a transportation package it needed to fund its services, the Oregon Department of Transportation must also reduce the amount it spends on contracts with companies like Interstate Business Solutions that perform road maintenance and cleaning.
The company agreed to a $4 million contract for the year to clean up Oregon’s highways, with the understanding that its contract would renew for another two years. But at the end of the 2025 legislative session, ODOT informed the company that its contract would expire and it would receive just $70,000 to continue operations through the end of the month. As a result, the company is paying out laid-off staff through July 18 — with only three employees remaining until the end of the month.
ODOT says it plans to scale back contracts
To make up for its funding shortfall, the Oregon Department of Transportation is planning to make $355 million worth in agency cuts, spokesperson Katherine Benenati told the Capital Chronicle. The department expects to save $181.6 million by laying off workers and another $173 million by reducing non-personnel expenses.
Non-personnel costs include purchasing fewer vehicles and fewer maintenance materials, such as salt, sand, deicer and to chip seal, a cheaper temporary alternative to repaving roads.
The department also anticipates scaling back spending under many of its contracts with private businesses, Benenati said.
But it doesn’t anticipate an impact to its contracts for highway design and construction, she said. Those projects are mostly funded through state and federal funds that are dedicated by law to capital projects and can’t be used for operations and maintenance.
Cleanup company contracted through ODOT remains hopeful for a special session
Morgan Johnston, Interstate Business Solutions’ senior director of business development and government affairs, said she understands the uncertainty around Oregon’s transportation funding.
“We’re really sad to see this go, and we’re hopeful that the legislature can come back and fund this,” she said.
Local Oregon leaders have urged Gov. Tina Kotek to call for a special session to resolve the state’s transportation funding woes, and Kotek has hinted she may do so.
“As governor, my job is to get the job done and I have tools at my disposal to get that done, and I just hope everyone’s going to show up for work when they need it,” Kotek said the day after the legislative session ended.
Some Republicans, most of whom opposed this year’s Democratic-led transportation package, House Bill 2025, are also considering solutions. In a newsletter on Monday, Rep. Mark Owens, R-Crane asked his constituents their thoughts on a 6-cent gas tax increase.
The company’s contract with the department of transportation not only made Oregon a cleaner state but it gave vulnerable people stable jobs, Johnston said.
The company, which contracts with state transportation departments in Indiana, Iowa, Kansas and Missouri, makes it a goal to hire historically marginalized people. Formerly incarcerated people make up 50% of its workforce, followed by formerly unsheltered individuals, veterans and others with resume gaps.
Oregon taxpayer dollars worked “double time,” she said, because the company was reducing recidivism and reducing its employees’ need for food assistance and Medicaid.
“We love working in Oregon,” Johnston said. “It’s been really a dream, and we’ve loved all the people we’ve been able to employ and help.”