Oregon Road Funding Bill, Slimmed Down, Moves Forward

Democrats Push Through Key Proposal

After days of tense negotiations, Oregon Democrats advanced Gov. Tina Kotek’s transportation funding plan on Sunday afternoon, though not without significant concessions and political drama. The package, originally pegged at $5.8 billion, has been trimmed down to roughly $4.3 billion over the next decade, reflecting a compromise struck to ensure progress in the Legislature.

The bill, now labeled House Bill 3991, is designed to fund critical road maintenance, prevent layoffs at the Oregon Department of Transportation (ODOT), and provide short-term support for public transit.

A Scaled-Back Transit Tax

The most notable concession came in the form of reduced transit funding. Under Kotek’s initial plan, Oregon’s existing 0.1% payroll tax would have doubled permanently to 0.2%. Republicans balked, and after lengthy standoffs that stalled proceedings on Friday, Democrats agreed to limit the increase to two years only.

As a result, the transit portion of the package is far smaller than initially envisioned. While welcomed by Republicans, the decision frustrated transit advocates who fear the move only delays deeper funding crises.

“We’re setting ourselves up for another fiscal cliff in this really vital public service,” said Sen. Khanh Pham, D-Portland, the only committee member to oppose the amendment.

Other Tax and Fee Increases Intact

Despite the concession, Republicans could not block a slate of other fee hikes included in the package:

• Gas tax: A six-cent increase, bringing the state rate to 46 cents per gallon starting Jan. 1, 2026.

• Vehicle registration fees: Higher annual fees across passenger vehicles, utility vehicles, motorcycles, and mopeds.

• Title fees: A sharp increase for passenger vehicles, from $77 to $216.

• Electric and fuel-efficient vehicles: Higher surcharges, plus a future requirement for EVs to join Oregon’s OReGO per-mile program or pay a flat annual fee.

Republicans repeatedly argued these costs would hurt working Oregonians already struggling with inflation. “They just can’t afford more tax,” said Senate Minority Leader Daniel Bonham, R-The Dalles.

Guardrails on Future Increases

Democrats also adopted a second amendment aimed at addressing Republican concerns: state agencies will not be allowed to automatically raise transportation taxes in the future. Earlier versions of the bill had given bureaucrats leeway to adjust fees to maintain fairness between passenger cars and freight trucks. Under the revised measure, agencies can only make downward adjustments, not upward.

Political Absences and Tension

While lawmakers debated for hours on Sunday, Gov. Kotek herself was conspicuously absent. The governor, who had called legislators back for a special holiday weekend session, skipped the hearing entirely.

Republicans seized on the absence. “We’re all here doing this work. It is important enough for us to have given up our Labor Day weekend. Here we are. And she’s not here,” Bonham said pointedly.

Kotek’s office later said she had canceled a planned vacation and was “closely monitoring proceedings” from somewhere in Oregon, though staff would not disclose her location for security reasons.

Public Reaction: Mixed and Passionate

Dozens of Oregonians testified on the bill, echoing the broader divide. Many voiced dismay at the pared-back scale compared with House Bill 2025, debated earlier this year, while others railed against higher taxes.

Written testimony leaned strongly against the increases, but in-person testimony tilted in favor of passing the package to protect jobs and infrastructure.

Yamhill County Commissioner David “Bubba” King captured the ambivalence: “A transportation package must pass. Without it, our roads and bridges will fall further into disrepair. But this package is a prime example of why I refuse to affiliate with either political party. Even if you call this a compromise, the truth is the process has been dysfunctional.”

GOP Amendments Rejected

Republicans proposed their own changes to redirect hundreds of millions of dollars from bike, pedestrian, and climate-focused projects toward basic road maintenance without raising taxes. Democrats voted down those amendments, arguing the programs targeted are also essential.

“I cannot support this amendment because what it aims to do is take money from things that are also critical services,” said Sen. Wlnvsey Campos, D-Aloha.

Next Steps

HB 3991 now heads to the House floor on Monday, with a Senate vote expected later in the week. Democrats hold three-fifths supermajorities in both chambers, technically enough to pass tax increases without Republican support. Still, party leaders face the challenge of keeping their caucus united while fending off GOP criticism that the package is too costly and poorly designed.

With ODOT warning of layoffs and infrastructure needs mounting, lawmakers are under pressure to deliver. The slimmer bill may not satisfy every constituency, but for now, it represents Oregon’s best shot at avoiding deeper transportation crises.