Governor and Dems gird for special session on transportation – BikePortland

Oregon Governor Tina Kotek and her allies in the legislature hope the third time’s a charm when it comes to their efforts to pass a major transportation funding package. The opposition hopes it’s the third strike.

After failing to pass two earlier versions of a bill — despite having control of the governor’s mansion, the House, the Senate and a Democratic supermajority — Kotek will try again in a special session slated to begin one week from today on August 29th. To set the table for next week’s debates, lawmakers have scheduled a public hearing on the current version of the bill that will take place on Monday at 3:00 pm.

To ensure the emergency session isn’t a third strike, Kotek has stripped the proposal down yet again in an effort to make centrist Democrats comfortable and maybe even pull a Republican or two into the “yes” column in order achieve the “bipartisan bill” label. According to Oregon Public Broadcasting, the draft proposal (currently known as Legislative Concept (LC) 2 because it doesn’t have an official bill number yet) would raise about $5.7 billion over the next decade — about one-third the amount of the first version of House Bill 2025 that passed out of committee in late June. After that initial version failed to receive a vote in either chamber, Democratic leaders offered up a version with lower tax increases, only to see that one die as well. (A last-gasp effort was so bad it barely warrants a mention.)

This time around, Kotek and her allies believe they’ve got a bill that can get over the finish line. In a summary of the bill provided by the Governor’s office this week we learned that the bill relies on four key tax increases:

• a six-cent increase to the gas tax (which is currently 40-cents per gallon),
• an increase to vehicle title and registration fees, which would go up by $42 and $139 respectively,
• a $30 fee for EV drivers (which the Governor’s office says is the average cost to Oregon drivers who pay the 6-cent gas tax increase),
• and a doubling of the payroll tax (from 0.1% to 0.2%) that funds public transit.

In addition to these new taxes and fees, the bill would also make several key administrative and policy changes.

LC 2 simplifies the weight-mile tax paid by truck operators and modernizes how the diesel tax is paid. It also mandates an update to the state’s methodology for how it taxes light and heavy vehicles to make sure the process (known as the Highway Cost Allocation Study, which I delved into last year) is revenue neutral and balanced. (This was done in part due to lobbying from freight truck operators who sued the Oregon Department of Transportation in 2024 because they say the existing tax formula charged them too much.) The bill will also require existing electric vehicle owners to enroll in a Road User Charge program starting in July 2027. New EV owners would need to sign up by January 2028, and hybrid-plug-in owners by July 2028. The ODOT accountability measures included in HB 2025 are carried over into the new bill.

As BikePortland readers recall, I made a big deal about the kerfuffle over tolling in the previous bills and how Republicans successfully pushed a false narrative that HB 2025 would lead to tolling in Oregon. That was not the case, but Governor Kotek wants to make sure those critiques don’t bubble up again this time around. LC 2 contains a provision that repeals the current state law (ORS 383.150) that allows Oregon to toll specific interstates. That law was passed in the previous transportation bill in 2017 when lawmakers set up a program to levy tolls on Portland-area freeways in order to pay for specific megaprojects. Kotek has since ordered a pause on that program due to concerns over voter pushback and the cost to implement it. According to the Governor’s office, this repeal does not impact the state’s ability to toll roads in the future.

Despite all these changes, Kotek and Democrats in Salem will still have to overcome a lot of opposition — and some of it will come from within the newly formed committee tasked with discussing the bill. The two co-vice chairs of the Joint Interim Committee on Transportation Funding are two Republican leaders who are vehemently opposed to any new taxes to pay for transportation. Senator Daniel Bonham (a regular on a podcast called Oregon DOGE) and Representative Christine Drazan (rumored to be running for governor) have staked their political careers on bringing a Trumpian austerity and anti-government sentiment to Oregon. Instead of new revenue sources, they think ODOT should use emergency reserves to maintain staffing levels. They also want to eliminate ODOT offices and programs they feel are not the “core mission” of the agency — like those that deal with climate change, civil rights, public transit, bicycling and walking, and so on. During the previous session, Drazan spearheaded a failed transportation bill that sought to repeal Oregon’s Bicycle Bill.

Democrats are saying they’ve counted votes carefully this time around and won’t need Republican support to pass their bill. Hopefully they learned a lesson from the regular session when party leaders wasted precious time trying to compromise with Republicans, only to be left without any bipartisan support.

Interestingly, the Republicans’ stance that the state doesn’t deserve more funding has some overlap with popular progressive ODOT critic, Joe Cortright. Cortright, a co-founder of No More Freeways and notable economist with decades of experience on transportation budgets both inside and outside government, is garnering headlines for his stance that ODOT “has a spending problem, not a revenue problem.” In a new interview with Willamette Week, Cortright says ODOT is misleading the public about their finances and that their budget could be made whole if they’d simply stop over-spending on several megaprojects.

In their defense, ODOT maintains that their funding crisis is very real. The agency says their capital construction budget is funded through federal grants and legislatively dedicated monies that are separate from funding for maintenance and operations, and that they’re legally unable to move money around as freely as they’d prefer.

Meanwhile, active transportation and safety advocates are disappointed that Governor Kotek’s latest bill has zeroed-out funding for programs like Great Streets (which hasten jurisdictional transfers by investing in the state’s orphan highways like SE Powell and SW Hall boulevards), Safe Routes to School, electric bike rebates, and Oregon Community Paths. Previous versions of the bill would have funding those programs to the tune of about $1 billion.

We’ll see how all these viewpoints shake out starting at the public hearing this coming Monday, August 25th. Stay tuned.