Update 9/3, 8 am: With one Democratic member of the Oregon Senate, Chris Gorsek, out for health reasons, the special session is effectively on hold. Democrats can’t afford to lose a vote, so they’ll need to wait until Gorsek is healthy enough to return to Salem and vote “aye” on the bill. The current plan is for the Senate to take up the bill in two weeks, on September 17.
Update 9/2, 10 am: An amended version of Kotek’s bill made it through the Oregon House of Representatives yesterday, with legislators mostly split down the party line. There were two exceptions to that rule: Republican Representative Cyrus Javadi voted to approve the bill, and Democrat Rep. Annessa Hartman voted against it.
The bill was amended to phase out a transit payroll tax increase after only two years. If the package is signed into law, Oregonians will have 0.2 percent of their monthly paychecks dedicated to statewide public transit service starting on January 1, 2026. (Currently, the tax is 0.1 percent.) In the version of HB 3991 that passed the House yesterday, that tax increase will sunset in 2028. With that change, lawmakers now expect the transportation funding bill will raise $4.5 billion over the next 10 years.
The Senate is expected to take up the bill Wednesday.
Original story:
With no quorum, Oregon’s special legislative session was stalled Friday, when lawmakers were supposed to reconvene to find a funding solution for Oregon’s transportation system. While some initially thought Governor Tina Kotek could wrangle legislators into passing a transportation package quickly, it now appears that the process will extend well into next week.
The session comes after legislators failed to pass a long-awaited transportation package before the 2025 regular session adjourned in June. Now, Kotek hopes legislators will be able to finish the job, and approve enough additional funding to prevent mass layoffs at the Oregon Department of Transportation (ODOT), among other calamities.
A proposed funding package from Kotek and Democratic lawmakers known as House Bill 3991 (or LC 2, the former placeholder title) sets out to raise $6 billion over the next decade through motor vehicle use and fuel tax increases, a 0.1 percent increase in the payroll tax that funds public transit, and new road user charges for electric vehicles.
The dialogue among legislators and their constituents has revealed a deep, pervasive distrust of ODOT and how they spend Oregonians’ tax dollars. But transportation agencies say the stakes are high. Portland public transit agency TriMet is already planning to make significant service cuts starting this fall, and leaders say they need new transportation revenue from the legislature in order to avoid further devastation.
The outcome of the special session remains to be seen. Democrats have a supermajority in both chambers, which is required to pass new taxes, but that didn’t stop conversations last spring from going up in smoke. As of 4:30 pm Friday, the Legislature still wasn’t able to do a first reading of the bill, due to absent lawmakers in the House of Representatives leaving them without a quorum.
Either way, statewide tensions about transportation funding are unlikely to dissipate anytime soon, and could be influential in the lead-up to the 2026 governor’s race.
What’s in Kotek’s transportation bill?
Kotek’s bill includes several new tax mechanisms to raise money for state transportation programs. HB 3991 would raise the state gas tax by 6 cents for a total of 46 cents per gallon (Portlanders pay an additional 10 cents per gallon through the local gas tax), and raise vehicle registration and title fees by $42 and $139, respectively.
The bill would also implement an additional $30 registration fee on electric cars, and a new road usage charge on all hybrid and electric vehicles. The latter initiative would make Oregon just the second state in the country to implement an electric vehicle pay-per-mile charge, and it has been criticized by some environmental advocates as a harmful disincentive against buying low or zero-emission cars. Others see it as a necessary way to maintain revenue as more people transition to electric vehicles, which is an important part of the state’s climate plan.
Revenue from the vehicle use fees will be directed into the State Highway Fund and distributed between the state (50 percent), counties (30 percent), and cities (20 percent) in what’s often referred to as the “50/30/20 split.” Due to limits set in the Oregon Constitution, that money can only be used for constructing, maintaining, and operating highways, roads, and roadside rest areas—not public transit or off-road bike paths, for example. A portion of it will be used to prevent mass layoffs and service cuts at ODOT which currently faces a $300 million budget gap.
On top of those fees, the bill would double the 0.1 percent payroll tax that funds the Statewide Transportation Improvement Fund (STIF), which supports public transportation around Oregon. The resulting 0.2 percent STIF charge is lower than what transit agency leaders have said is necessary to keep Oregon’s public transportation systems running optimally. But it would at least provide some additional revenue to cash-strapped transit agencies around the state.
The bill has been praised by freight industry leaders for its changes to the diesel fuel tax and the weight-mile tax paid by truck drivers, as well as the bill’s attempts to ensure those driving heavy vehicles are not unfairly and excessively charged, as freight lobbyists have alleged.
The proposal also seeks to repeal the mandatory toll program that was included in Oregon’s last major transportation package, House Bill 2017, as a way to fund freeway megaprojects including the I-5 Rose Quarter expansion and I-205 Abernethy Bridge project. Kotek, who shook up a major aspect of Oregon’s transportation revenue calculus when she implemented a pause on toll collection shortly after entering office, has said the repeal doesn’t preclude the state from tolling roads in the future.
The repeal appears to be a response to the backlash that sprang up toward the end of the regular legislative session in June, when misinformation about tolling in HB 2025 caused some lawmakers, most notably Democrat Senator Mark Meek, to revolt against the package. But it moves the Overton window away from tolling and congestion pricing as a way to pay for expensive freeway expansion projects and mitigate traffic.
Finally, Kotek’s bill attempts to grapple with accountability at the state transportation agency, which has become a hot topic among state lawmakers and pundits leading up to the special session. The bill includes certain accountability provisions that were included in HB 2025, including new auditing and oversight programs, particularly on major transportation projects. But it seems unlikely that these accountability provisions will be able to win over skeptics, particularly those in the state’s Republican Party, most of whom have remained steadfast in their opposition to the bill.
“Stop playing politics and get this over the finish line.”
Nobody appears to be overjoyed by the contents of Kotek’s bill. The warmest reception to the proposal has been tepid, with many seeing it as a bitter but necessary pill to swallow. But there’s a vocal faction of Republican lawmakers and Oregon residents who apparently hate the bill, and aren’t afraid to say so.
The bill’s strongest advocates include leaders in the freight industry and at public transit agencies, as well as local government officials who are pleased with Kotek’s proposal to continue sharing State Highway Fund revenue with counties and cities, who rely on the funds to keep local streets in order.
Transportation reform and climate organizations have criticized the bill for failing to invest in bicycle and pedestrian infrastructure and safety programs. But most are not working to undermine the bill.
“Every dollar we don’t spend on crosswalks, sidewalks, and bikeable connections today is a dollar we’ll spend down the line on ER visits and bloated road projects,” Margaux Mennesson, writing on behalf of The Street Trust advocacy group’s board of directors, said. “We need a serious, values-aligned strategy for transportation safety—one rooted in performance, accountability, and actual human outcomes.”
In his testimony during a public hearing for the bill on August 25, Oregon Trucking Association Chairman Erik Zander asked lawmakers to “stop playing politics and get [this] package over the finish line.”
“We’re willing to take a reasonable, forward-looking stance, even when others won’t, because transportation should not be a partisan issue,” Zander said. “[The bill] isn’t perfect, but we can’t afford for ‘perfect’ to be used as an excuse to oppose the good. That is not governing, that’s playing politics with our livelihood.”
The fight over accountability
Calls for reform at ODOT are nothing new. But they’ve long been seen as the domain of climate advocates on the left, who believe the agency is too focused on freeway megaprojects and other car-centric transportation programs. The tone has changed leading up to the special session, to one more representative of the second Trump era.
Among the thousands of pieces of written testimony against Kotek’s bill are frequent references to “efficiency” à la Elon Musk. A number of comments allege the state is wasting valuable transportation money on things like bike lanes, and assisting undocumented immigrants, along with programs for diversity, equity, and inclusion (the latter of which accounted for less than 0.5 percent of ODOT’s last budget). Almost all the negative responses spell out a deep, indiscriminate opposition to tax increases.
Most Republican lawmakers, meanwhile, are refusing to play ball, insisting that ODOT is unaccountable beyond measure and doesn’t need more tax revenue. Their own transportation funding proposals have insinuated that a significant portion of the transportation department’s woes could be alleviated by scrapping climate programs that make up a small percentage of ODOT’s overall budget.
Joe Cortright, an economist and longtime ODOT critic, is also an active part of the current accountability conversation. His diagnosis of ODOT’s budget problems has been consistent: They’re spending too much on multibillion dollar megaprojects like the I-5 Rose Quarter expansion and Interstate Bridge replacement. This problem is exacerbated by ODOT’s increasing reliance on taking out debt service to pay for its large capital projects. Paying down that debt eats up a significant portion of the agency’s revenue.
Unlike other bill opponents, Cortright says the amount of spending doesn’t bother him. It’s what ODOT’s spending it on that he takes issue with.
“This isn’t a fervent anti-taxing [belief],” Cortright told the Mercury. “It’s ‘let’s stop wasting money on things that are really destructive’.”
Other lawmakers and transportation advocates, also skeptical of ODOT, say standing in the way of the funding bill won’t make the agency any more accountable.
Senator Khanh Pham (D-Portland) has long called for more oversight of the state transportation department, and particularly their big projects. In a letter published in the Oregonian earlier this month, Pham wrote that she’ll welcome bigger conversations about transportation issues, including ODOT accountability, in the future.
But for now, she said, “asking motorists for six more cents at the pump is a small price to pay for safer streets and the peace of mind that Oregon will be more prepared to backfill the federal government’s withdrawal.”
One Republican, Representative Cyrus Javadi (Astoria), has stood out as a strong exception to the conservative backlash. In a blog post published earlier this week, Javadi wrote that it’s not shocking that Oregonians don’t want to pay more taxes.
“But here’s the thing: the roads don’t fix themselves, and neither do bridges when they fall into rivers. And our transportation system is staring at a funding hole big enough to swallow Highway 6 whole,” Javadi wrote. “And now, we’re down to two options: the politically convenient one, and the only one that actually works.”
The one that actually works, Javadi thinks, is passing the transportation package.
The special legislative session will likely continue through the middle of next week. The Joint Interim Committee On Transportation Funding is expected to hear another round of public testimony, but no hearing is currently scheduled.
