Oregon Senate passes $4.3 billion transportation package

By MIA MALONADO
Of the Oregon Capital Chronicle

The Oregon Senate on Monday in a party-line 18-11 vote passed a long-awaited transportation bill that would update the state’s funding sources for road maintenance and operations.

House Bill 3991 would raise about $4.3 billion over the next 10 years to fund road maintenance and operations by raising the gas tax by six cents, nearly doubling most vehicle registration fees and doubling the payroll tax used to support public transit from 0.1% to 0.2% of a paycheck — among other fee hikes for electric vehicles.

The bill settles a growing budget gap in Oregon’s transportation budget, but advocates warn it’s just a temporary fix and overlooks key issues such as climate sustainability, traffic congestion and road safety near schools — all while Republicans pledge to bring the matter before voters in 2026.

Within the first 25 minutes of floor debate, Senate Republican Leader Bruce Starr, R-Dundee, attempted to block the bill from moving forward by offering two amendments, one which would have freed up existing funds within the Oregon Department of Transportation budget and allowed the agency to direct it to immediate needs, and another amendment that would have given Oregon voters the final say on whether to approve or reject the bill in the November 2026 general election. Both motions failed.

Senate Republicans then requested a caucus meeting, during which they held a press conference to explain the amendments.

Starr said Republicans don’t want roads to deteriorate or for transportation employees to lose their jobs, criticizing Gov. Tina Kotek and Democrats for not collaborating on a bipartisan transportation solution. He said Republicans will work to create a referendum, or allow Oregon voters to reject or approve the legislation in the November 2026 election.

Sen. David Brock Smith, R-Port Orford, said many of his constituents can’t afford the tax and fee hikes in the transportation bill.

“It’s going to hurt my rural Oregonians more because they have lower income levels and have to drive farther for goods and services than anywhere else, and they’re not driving a fuel efficient vehicle to do so,” he said at the conference.

Oregon Democrats during the floor debate expressed support for the bill. Some called the bill a good start, while some even called it insufficient.

“It does not reduce greenhouse gas emissions, it does not address seismic vulnerabilities, and it does not reflect the testimonies calling for clean air and reliable transit,” said Sen. Courtney Neron Misslin, D-Wilsonville. “So yes, I am disappointed… but I’m certainly voting yes because this bill is necessary to keep essential services of transit.”

The last time Oregon passed a major transportation bill was in 2017. Today, the Oregon Department of Transportation is facing significant budget shortfalls driven by declining tax revenue, inflation and spending restrictions. Without new ways of adding revenue, the department will have to lay off almost 500 workers and scale back essential services like road maintenance, snow removal, customer support and highway and graffiti cleanup.

Lawmakers failed to compromise on a transportation bill during the regular six-month legislative session, so Kotek called for a special session over Labor Day weekend to address the budget shortfall.

The Oregon House passed the bill on Sept. 1, but a Senate vote was postponed twice because Sen. Chris Gorsek, D-Gresham, was recovering from surgery and Democrats needed his vote for the bill to pass.

Kotek has twice delayed the Oregon Department of Transportation from laying off its workers in anticipation of passing a bill in the special session. Originally slated to happen in July, then Sept. 15, agency layoffs are now set to take effect on Oct. 15 unless the bill passes.

The Association of Oregon Counties applauded the bill’s passage. The bill preserves how the state splits the revenue raised from the gas, with half going to the state, 30% to counties and 20% to cities.

The legislation makes it possible for counties to maintain current road department services and operations, but it’s just a short-term fix, the association said.

“Over the last three decades, counties have been forced to make difficult decisions like downsizing road crews, reducing services and postponing crucial safety interventions and routine maintenance,” Association of Oregon Counties Road Program Director Brian Worley said in a statement. “Without stable long-term revenue, counties will continue to be forced into service and staffing reductions and will see deteriorating and more dangerous roads.”

Move Oregon Forward, a coalition of climate, equity and transportation advocates, criticized the bill’s mandatory road usage charge, saying it unfairly penalizes drivers who drive electric vehicles and makes driving an electric vehicle one of the most expensive ways to drive.

“In the 2026 short session, we need to fix issues like the Road Usage Charge and EV taxes, along with new accountability and revenue tools,” said Kristopher Fortin Grijalva, the transportation program director at Oregon Environmental Council. “By 2027, we aim to deliver a truly fair, safety-forward, climate-smart transportation package that serves everyone in Oregon,”

The future of public transit also remains uncertain, Move Forward Oregon said. Although House Bill 3991 doubles the payroll transit tax, that tax increase will expire in 2028.

“I use transit to keep my life moving and reduce my transportation costs,” Cassie Wilson, the legislative manager of 1000 Friends of Oregon, said in a statement. “For me and so many others, service cuts mean longer waits, fewer options and more economic uncertainty. We need the legislature to build a transportation system for the future, not just short term fixes.”

Used with permission from Oregon Capital Chronicle. See more at www.oregoncapitalchronicle.com.