Oregon lawmakers will convene Friday for a special legislative session that may be more marathon than sprint.
Gov. Tina Kotek called the session to complete what she says is unfinished business: passing a transportation funding package that will avert laying off state employees and help cities and counties pay for road repairs.
But legislative Republicans aren’t having it. For months the party has insisted that higher taxes proposed by Democrats are not necessary, and that the Oregon Department of Transportation can use its existing money more wisely.
The difference of opinion could make the session an extended affair, likely not concluding until Wednesday at the earliest. As lawmakers get ready to meet, here’s what you need to know.
Why, exactly, are legislators meeting?
Oregon Democrats had ambitious plans this year to pass a bill that would raise major new revenue for roads, and shift the paradigm of how the state funds transportation long-term.
But the party’s leaders didn’t unveil that bill, House Bill 2025, until the session’s final weeks. And it wasn’t until even later that Oregonians got an idea of exactly how much the proposal would raise in taxes.
The condensed timeline didn’t give HB 2025’s backers a lot of time to win over skeptical lawmakers, including those in the super-majority Democrats’ ranks. The effort collapsed on June 27, the session’s final day, when it became clear there was not enough support to pass the bill in the Senate.
But with no new funding, the state faced a problem: a $300 million hole in the ODOT budget. With the agency threatening to lay off nearly 500 employees and slash services like plowing roads, filling potholes and cleaning up trash and graffiti, Gov. Tina Kotek called a special session.
What’s in the tax proposal, and how much would it cost?
Kotek’s bill incorporates some elements that were in HB 2025, and leaves out others. It would:
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 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 tax, created in 2017, sent roughly $130 million to various Oregon transit agencies last fiscal year.
- 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” tax paid by heavy trucks, and make other changes favored by the freight industry.
All in all, Kotek’s bill is expected to raise about $5.8 billion over the next decade — roughly half the size of the Democratic bill that failed in June.
Much of that money would be split between state and local governments. Only about $290 million would go toward ODOT in the current budget. The agency says that’s enough to avert layoffs.
What’s the argument against the bill?
Republicans say Democrats suffer from a lack of imagination. Since January, they’ve argued that the state doesn’t need more money for roads, it just needs to better focus the money it has.
To that end the GOP has put forward proposals for shifting transportation money away from priorities its members don’t agree with. That includes ending state funding that goes to public transit agencies around the state, a change that agencies say would lead to drastic service cuts.
Republicans have also suggested defunding what they label “climate initiatives” at ODOT that pay for things like bicycle and pedestrian infrastructure and helping people switch to electric vehicles.
The GOP has signaled it will introduce another counter-proposal on Friday morning. But in any case, it’s fair to say that Republicans are not on board with Kotek’s bill.
Democrats failed before. Will they be able to pass a road funding project this time?
The party’s leaders are projecting optimism.
“I am confident that next month legislators are going to show up, they’re going to approve the necessary funding for the state’s transportation needs, and I truly appreciate their partnership right now to address the crisis that is facing the state,” Kotek told reporters in July.
Kotek has numbers to back up that confidence. Even if all Republicans vote against the bill, Democrats have the three-fifths majority in each chamber required to pass new taxes.
The question is whether all Democrats are on board. In June, Sen. Mark Meek, D-Gladstone, proved a crucial roadblock to the transportation package. Meek said at the time he believed the bill raised taxes by too much, and that he was worried it would pave the way for interstate tolling, a flashpoint in his Clackamas County district.
Kotek’s bill looks to address those concerns. Not only does it propose a smaller tax increase than the previous bill, it erases language in existing state statute requiring ODOT to move forward with tolling.
The bill also has the backing of the Oregon Trucking Associations, a freight lobbying group frequently allied with the Republicans.
That might smooth its path, but Oregonians shouldn’t expect a quick session. Republican leaders say they will refuse to fast-track the tax proposal by waiving procedural rules. Assuming they follow through, the bill will have to sit in each chamber for at least three days before a vote. The special session may last until next Wednesday.
Notably, though, Republicans do not appear ready to deny Democrats a quorum by boycotting the session.
What’s the fallout of this likely to be, pass or fail?
The consequences of failure seem clear. Kotek has put off layoffs at ODOT until Sept. 15, saying she expects lawmakers will agree to send the agency more money. If that doesn’t happen, ODOT says it will move forward with laying off employees and shuttering maintenance stations.
If the bill does pass, it will almost certainly be a big talking point in next year’s election.
Kotek is expected to seek reelection in 2026, and she may face a familiar challenger if House Minority Leader Christine Drazan, R-Canby, decides to mount a second gubernatorial bid. Drazan has railed against the tax proposal – and Kotek’s role in it — at every turn. Whatever Republican winds up winning the party nomination next year can be expected to do the same.
Will Oregon voters get a say in this tax package?
That’s a big question. When Democrats put forward a transportation package earlier this year, Republicans started collecting head-turning donations in order to refer the bill to voters.
Now that Democrats have re-tooled their proposal — and won over a big Republican ally — it’s not entirely clear there is the same level of enthusiasm to put the bill’s fate on the ballot.
If a successful referendum campaign does emerge, Kotek’s proposal may be in big trouble. The last time a gas tax hike was on the statewide ballot, in 2000, nearly 90% of voters were opposed. Politicos in both parties expect the current proposal would have similarly dim chances.
