600 state workers brace for layoffs as reality of transportation funding gaps set in – BikePortland

Just three days after the session ended, the consequences of the Oregon legislature’s failure to pass a transportation funding package are coming into focus.

In the past 24 hours, we’ve heard from the State of Oregon and the City of Portland about what the lack of funding will mean to their transportation agencies. At the Oregon Department of Transportation, layoff notices for an estimated 600 people are expected to be in the mail next week. At the Portland Bureau of Transportation, most employees will be safe, but cuts to basic services are now inevitable.

At 12:22 am Saturday, about one hour after the legislature adjourned their session, ODOT Director Kris Strickler sent what he referred to as, “The hardest message I’ve ever had to send in my career.” “I know this is shocking, scary and frustrating for every single one of you,” Strickler wrote. “It is for me too.”

Because of the legislature’s inaction, Strickler said ODOT is forced to make significant layoffs starting in the coming days and weeks. Strickler said HR will begin contacting the 600 employees in the next few days to help them process the termination of their employment with the agency.

In an interview with Oregon Public Broadcasting today, Senator Mark Meek — the Democrat whose opposition killed HB 2025 — downplayed the urgency of ODOT cuts. Asked if he believed Governor Tina Kotek’s threat that the agency would begin layoffs this week, Meek replied, “They don’t necessarily have to be right now,” and added that they could be “next year some time.”

But today is July 1st, the start of a new fiscal year and biennium for ODOT. And because of inflation, growing construction costs, flat funding mechanisms, and years of legislative direction to spend most of the agency’s money on construction projects, ODOT has a State Highway Fund shortfall of $354 million.

So why do they have to start layoffs immediately? According to ODOT Deputy Directory of Finance Travis Brouwer, ODOT has already used up their balances in State Highway Fund this biennium and as a result, they, “Have no cushion to continue with current service and staff levels.”

And despite what you might hear from some elected officials or bad faith media pundits, ODOT can only use the State Highway Fund for operations (which includes staffing) and maintenance. (On that note, Meek admitted in the OPB interview today that one reason he didn’t support the bill was because it “wasn’t apparent” how or if the bill would fund operations and maintenance (one of Meek’s priorities). But it was clear from the start that HB 2025 would send about $200 million per year to the State Highway Fund for precisely that purpose.)

Brouwer explained to me the existing taxes and revenue sources in HB 2017 are permanent, but because they are flat rates they erode each year as inflation rises and people use less fuel. And as costs go up, “that means you’re actually going backward.”

Brouwer estimates that the State Highway Fund will grow by only about 0.35% per year for the next eight years (see above).

For the Portland Bureau of Transportation, the lack of a state funding package means they’ve got to make up for $11 million in expected revenue that would have gone to operations and maintenance.

Back in May, Portland City Council threw PBOT a lifeline by voting to raise the fee paid by rideshare users to $2 per ride (up from 0.65 cents). That increase is expected to raise $10 million annually. In an email today from PBOT Director Millicent Williams to agency staff, she said that additional revenue was supposed to go toward expanded services, “but we will now rely on [those funds] to mitigate some of the devastating loss brought about by legislative decisions.”

PBOT will still have to make some layoffs, but they haven’t said how many people will be let go. There’s an all-staff meeting scheduled for July 15th were that news is likely to be shared.

The net result is that PBOT will have to cut services. Here’s the list of cuts the city has shared so far:

• Up to 300 streetlights that we won’t be able to repair this year.  
• 50% less capacity to respond to requests from the public for basic safety improvements
• Delays in traffic signal upgrades on busy corridors impacting safety for pedestrians, freight, and people biking, taking public transit or driving.    
• Delays to currently funded projects of all types (maintenance and capital improvement safety projects) because of reductions in force.

Mayor Keith Wilson said in a statement today he’s “Deeply disappointed” in the legislature for their failure to pass funding and that PBOT will “determine the exact path forward” in the coming weeks. Wilson has hinted in recent weeks that he and leaders on council have been meeting with PBOT to address funding gaps. I have a strong hunch they’re cooking up some sort of utility fee approach and will frame roads as an essential service like water or electricity.

Regardless of what their plan is, the legislature’s shocking abdication of responsibility has sent shockwaves through ODOT and PBOT and unless Governor Kotek can pull a rabbit out of her hat in an emergency session, we’ve got at least a year or two of very choppy waters ahead.