The Oregon Department of Transportation (ODOT) is warning residents of potential service reductions and job losses after key funding provisions were put on hold following a successful ballot initiative effort.
House Bill 3991 was passed by lawmakers earlier this year with the goal of stabilizing ODOT’s finances and preserving essential transportation services across the state. The funding package included a six-cent increase to the state gas tax, along with higher vehicle title, registration, payroll and select DMV fees.
However, the office of Oregon’s secretary of state confirmed that a political action group collected enough valid signatures to refer major portions of the bill to voters in the November election. As a result, several of the revenue-generating components are temporarily frozen, leaving ODOT without a large share of the funding it had expected.
In a statement provided to NBC5, the agency said updated financial projections now show a significant shortfall.
“Without most of the revenue originally anticipated from HB 3991, particularly the fuel tax and vehicle title and registration fee increases, ODOT faces an estimated funding gap of approximately $242 million for the 2025–2027 biennium,” the statement said. “If the agency must continue operating under current revenue levels and legal spending limits, service reductions and layoffs would likely be required.”
State Sen. Noah Robinson of District 2 said he supports finding a long-term solution for transportation funding but believes raising taxes is not the answer.
“The bigger question is how ODOT is spending the money it already has,” Robinson said to NBC5. “Construction costs should have decreased over the years, yet projects now cost several times more than expected. Before asking Oregonians to pay more, we need a serious look at efficiency and accountability.”
Robinson said he expects voters to reject the tax increases at the ballot box and hopes lawmakers will then return to negotiations with a renewed focus on reform.
State Sen. Pam Marsh of District 5 expressed concern about the immediate consequences of budget cuts, particularly in southern Oregon.
“I am especially worried about winter maintenance on the I-5 summit and other state highways,” Marsh said in a statement. “I do not believe the ODOT budget can absorb cuts of this magnitude and still maintain the same level of service. While we will explore all alternatives during the February short session, this is a very serious situation.”
ODOT officials say the agency has continued hiring for critical winter maintenance roles but has slowed spending in other areas. Any layoffs would not occur until after the legislative session concludes in March, at the earliest.
An editorial in the Astorian, a newspaper that has been serving Oregon since 1873, suggested keeping some vacant jobs open—a move that could save more than $27 million over two years.
The editorial also pointed out other staffing reductions that could significantly lower costs. Eliminating eight positions that support coordination with local governments would save more than $5 million in wages and canceled project work, according to the Astorian.
Keeping 38 vacancies unfilled at DMV headquarters could reduce expenses by an additional $7.4 million, though the agency warned that customer service would remain at current levels with no improvement. Leaving 15 positions open across information technology, human resources and procurement departments could generate nearly $5 million more in savings.
The funding uncertainty comes amid leadership changes at the agency. ODOT Director Kris Strickler stepped down last week. Lisa Sumption, who currently leads the Oregon Parks and Recreation Department, has been appointed interim director.
Sources: KOBI 5, The Astorian