Gov. Tina Kotek will call lawmakers into a special session in late August to take another crack at finding millions — or billions — of dollars to pay for road funding in the state.
In the meantime, Kotek announced Tuesday she will delay nearly 500 layoffs at the Oregon Department of Transportation, ensuring 12 maintenance facilities throughout the state remain operational. Those layoffs were scheduled to take effect July 31, after lawmakers failed to find agreement on a major road-funding bill before the 2025 session adjourned.
The governor said the pain of those layoffs can be put off now that there is a renewed likelihood the Legislature will agree to fill a $354 million funding gap at ODOT. Kotek is directing ODOT to delay layoffs for 45 days.
“I am confident that lawmakers will step up next month to avert these layoffs by approving the necessary funding for the state’s transportation needs,” Kotek said in a statement. “I appreciate their partnership and am eager to be on the other side of this crisis.”
Not included in Kotek’s announcement of the Aug. 29 special session was clarity on exactly what a road-funding bill might look like.
Majority Democrats this year put forward a massive plan that would have raised taxes on vehicle sales, hiked the gas tax by 12 cents per gallon and increased a variety of other taxes and fees. That bill, House Bill 2025, died on the session’s final day when it became clear its price tag — $11.6 billion over a decade — was too high for it to secure passage.
The party rushed in that final day to move a substitute bill that would have increased the state’s 40-cent-per-gallon gas tax by 3 cents. The proposal was designed solely to fill the ODOT funding gap. The narrow scope of the last-minute proposal angered a wide range of interests — from cities and counties to transit agencies and bike advocates — and Republicans declined to waive rules that would have allowed it move forward quickly.
In recent weeks, lawmakers and engaged interest groups have suggested Democrats are keying in on a 6-cent hike to the state gas tax for the special session. That would be enough to forestall ODOT layoffs and send money to city and county road departments that are also strapped for cash.
While Kotek offered no specifics, she referred to “the state’s commitment to revenue sharing with local governments,” suggesting a gas-tax hike of at least 6 cents is in the works.
Kotek’s statement Tuesday also offered other hints of what might be on the table.
It includes a reference to “ratepayer fairness” that appears to allude to the freight industry’s concerns about heavy trucks paying more than their fair share in taxes. The industry has pushed for the state’s weight-mile tax on trucks to be restructured, and for rates to be rebalanced with those paid by cars.
Kotek also said she favors raising a 0.1% tax on Oregonians’ paychecks that goes to public transit. Transit agencies have warned of steep service cuts if that isn’t increased. Democrats proposed increasing the tax to 0.18% during this year’s session, but one source engaged in discussions suggested Kotek could double the tax to 0.2%.
What else might be in the works is unclear. There are major looming questions about the fate of a long-planned but unfunded project to widen and cap Interstate 5 through Portland’s Rose Quarter. The governor’s statement did not include a reference to finding money for highway megaprojects like that.
“The special session will be focused on critical near-term solutions to stabilize basic functions at ODOT and local governments,” Kotek’s statement said. “This is just the first step of many that must be taken to meet our state’s long-term transportation needs.”
In response to Kotek’s announcement, House Minority Leader Christine Drazan, R-Canby, repeated her party’s insistence that the state should repurpose existing tax revenue to fund ODOT, rather than raising taxes.
She argued the Legislature’s Emergency Board, which can spend a limited amount of money while lawmakers are not in session, could opt to close ODOT’s funding gap.
“We can still protect these jobs without raising taxes — and we should,“ Drazan said in a press release. ”Republicans have represented the voices of the people and fought hard to find solutions that don’t add new taxes. It’s now time for Democrats to do the same."
