by Mia Maldonado, Oregon Capital Chronicle
December 18, 2025
With a transportation funding referendum likely headed to Oregon voters in November 2026 and a short legislative session approaching, it’s unclear if and how Republicans and Democrats can compromise on a sustainable plan to fund road maintenance and operations.
House Bill 3991, which Gov. Tina Kotek signed into law on Nov. 7 after a special legislative session, was expected to raise $4.8 billion for the transportation department over the next decade. But some of the agency’s new revenue streams under the law — scheduled to take effect at the beginning of 2026 — were paused when opponents submitted almost 200,000 signatures to the Oregon Secretary of State with the goal to give voters the chance to overturn the law.
Without access to some of the new revenue, the Oregon Department of Transportation once again faces a significant funding gap that could result in layoffs and reduced services — even as transportation crews respond to rain-caused landslides alongside Highway 229 near the Oregon Coast and as mountain passes across the state remain closed or congested because of downed trees and power lines.
“Oregonians have exercised their ability to challenge actions taken by the legislature, and the governor respects the outcome of that process,” Kotek press secretary Roxy Mayer told the Capital Chronicle.
Republicans must work with Democrats now to find a different solution, Mayer said.
“The governor’s guiding principle is to avoid, as much as possible, immediate service cuts that will impact Oregonians,” Mayer said.
What fees and taxes are on pause?
Increases to vehicle registration and title fees, a 6-cent gas tax hike and a temporary doubling of the payroll tax used for public transit from 0.1% to 0.2% of a worker’s paycheck were set to take effect at the start of the year. Petitioners with No Tax Oregon paused those scheduled tax and fee hikes by turning in their signatures last week.
The fee and tax hikes will remain paused unless the state’s elections division finds there were not enough valid signatures. The office has until Jan. 29 to verify the signatures. Otherwise, the hikes will remain paused pending a statewide vote in November 2026.
The pause in the payroll transit tax hike means the average Oregonian making $68,000 will remain paying $5.60 a month in the tax instead of $11.20 per month.
For now, Oregonians will continue paying a 40-cent gas tax per gallon instead of 46 cents.
Title fees for passenger vehicles and trucks will remain unchanged, so vehicles averaging 19 miles per gallon or less will cost $101, $106 for vehicles between 20-39 miles per gallon, $116 for vehicles exceeding 40 miles per gallon and $192 for electric vehicles.
Registration base fees for a two year period for Oregonians driving a standard passenger car will remain at $86 instead of $170, $88 instead of $172 for motorcyclists and $126 instead of $210 for light and utility trailer drivers. Drivers will continue to pay a surcharge based on fuel efficiency, which means the total registration fee for most passenger cars is $126 or $136 every two years.
Collectively, the new fees and taxes were expected to raise $791 million in the 2025-27 budget cycle, followed by $1.1 billion for 2027-29 and $1.2 billion for 2029-31.
No transportation service cuts yet
Transportation Department spokesperson Katherine Benenati said no service cuts or layoffs have been determined within the agency, and any layoffs would not take place until after the legislative session ends in March. Kotek has continued hiring winter seasonal staff using existing funding, savings from vacancies and recent voluntary departures to maintain these services in the short term, she said.
Rep. Ed Diehl, R-Scio and one of the lead petitioners of the No Tax Oregon effort, said higher taxes aren’t the only way to fill the budget gap, arguing that Democrats need to reprioritize how they fund transportation.
“We’re paying for electric vehicle car chargers. We have a social equity office. We have climate justice initiatives. We have hundreds of millions of dollars in reserves on projects that will never transpire as currently designed,” he told the Capital Chronicle. “It’s a waste, but the Legislature is prioritizing those things over what the Oregon people want.”
Diehl and his Republican colleagues have pushed to rearrange transportation funding. However, most of the state transportation departments funding is legally designated for specific purposes, so reallocating funds would require a statutory or constitutional amendment to avoid legal challenges, according to department Finance and Budget Division Administrator Daniel Porter.
At least three Republicans on Wednesday — Reps. Mark Owens of Crane and Vikki Breese-Iverson of Prineville and Sen. Mike McLane of Powell Butte — urged the transportation department to seek emergency funding from the Legislature’s Joint Emergency Board in response to the historic flooding across the state this week. The 20-member board has the authority to allocate funding when the full Legislature isn’t in session.
Rep. Susan McLain, D-Forest Grove, called the Republicans’ request impractical.
“Are they going to ask for emergency funds for the rest of 2026 as well when they strip funding as part of their ballot measure to defund ODOT?” she said. “It is simply not realistic.”
McLain, co-chair of the Legislature’s Joint Transportation Committee, said House Bill 3991 is a quarter of what Democratic lawmakers proposed during the regular legislative session, and for three budget cycles she said lawmakers have made cuts to ODOT and worked on efficiency.
“We’ve done all of the compromise, the amending and the backup plan is that final bill that we passed in September, which is only a quarter of the original,” she said. “The short session is not going to help them.”
Democratic leaders shared similar concerns about the efforts to overturn the transportation funding law.
“Without those emergency funds, hundreds of hardworking Oregonians who plow highways, fill potholes and repair bridges are in danger of losing their jobs,” said Senate President Rob Wagner, D-Lake Oswego. “The Senate President’s Office is ready to work with ODOT and the Governor’s Office to manage this situation in the upcoming legislative session.”
House Speaker Julie Fahey, D-Eugene, said the transportation funding law was a heavily negotiated policy that had support from nearly every key transportation stakeholder in Oregon and considered the cost of living for Oregonians.
“The referral of only pieces of that package — repealing funding while leaving spending obligations in place — destabilizes our transportation system and jeopardizes Oregonians’ safety,” Fahey said. “The Republican politicians behind the referral effort don’t have a backup plan, and the transportation needs facing every corner of the state won’t fix themselves.”
Fahey said she will continue to work closely with her Senate colleagues and Kotek to keep Oregonians safe on their way to work and school.
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- 2:12 pmCORRECTION: This story has been updated to show accurate title fees, as a previous version of the story misstated how much title fees for passenger vehicles would cost.
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