Oregon Governor Tina Kotek is holding Republican lawmakers responsible for the failure of a key transportation funding bill during the recently concluded legislative session—an impasse that now threatens significant layoffs at the Oregon Department of Transportation (ODOT).
The proposed legislation would have injected critical funding into the agency to help address a mounting budget shortfall, which ODOT officials have warned could result in hundreds of job losses and the scaling back of infrastructure maintenance and planning across the state. According to the department, without legislative action, it is preparing to lay off as many as 250 employees beginning this fall, with deeper cuts possible in 2025.
The governor’s comments came after negotiations over the transportation package stalled during the 2025 short session. The package aimed to stabilize the department’s finances as it faces declining fuel tax revenues—a key source of road and bridge funding—exacerbated by the rise in electric and fuel-efficient vehicles. The bill would also have addressed inflation-related cost increases for construction projects and rising personnel expenses.
Governor Kotek had made the ODOT funding package a priority, warning that without a legislative solution, the department would be forced to take drastic cost-cutting measures that could ripple throughout Oregon’s transportation system. Kotek said Republican resistance to parts of the proposal—including provisions related to climate policy and vehicle fees—prevented the bill from securing enough bipartisan support to pass.
Republicans, however, have pushed back on the governor’s characterization, stating that their caucus was not given sufficient input in crafting the final version of the bill. Several GOP lawmakers argued that the package included components they viewed as overly burdensome to rural drivers and small businesses, such as proposed increases in registration fees and surcharges on non-gas vehicles. Some also criticized what they saw as excessive spending and insufficient accountability measures within the bill.
ODOT’s financial troubles are not new. The department has been warning of structural budget gaps for several years due to declining revenues from the state gas tax, which has traditionally funded road maintenance and capital projects. While Oregon’s vehicle miles traveled have rebounded since the pandemic, gas tax revenue has not kept pace, a trend that analysts say is expected to continue.
The proposed bill would have provided a bridge of short-term funding and authorized the agency to explore new long-term revenue mechanisms, including road usage charges or mileage-based fees. Without the bill, ODOT officials say they will be forced to delay maintenance on highways, reduce planning for future construction projects, and issue layoff notices to employees in multiple divisions.
Governor Kotek’s administration said it will continue working on a transportation funding solution ahead of the 2026 long session, but warned that without immediate intervention, ODOT’s capacity to deliver essential services could be significantly diminished.
Meanwhile, labor unions representing state transportation workers have expressed frustration with the Legislature’s inaction. Union leaders said the looming layoffs threaten not only workers’ livelihoods but also the safety and reliability of Oregon’s roads.
With Oregon’s transportation infrastructure at a crossroads, and the political divide on how to fund it growing deeper, the failure to pass a compromise bill leaves a critical question unresolved: how to finance and maintain a modern, resilient transportation system amid changing economic and environmental realities.
The next opportunity for comprehensive legislative action may not come until the 2026 regular session, unless lawmakers are called back for a special session—an option Governor Kotek has not ruled out.