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Transportation Funding in Oregon

Overview

The Oregon Department of Transportation will collect just over $4.64 billion in total revenue during the 2017–2019 biennium.

  • 18 percent from the federal government.
  • 82 percent from state sources-- the state fuels tax, taxes on heavy trucks, driver and motor vehicle fees, and bond proceeds and Certificates of Participation.

ODOT also receives funding for specific purposes from cigarette tax revenues, lottery funds, and a variety of transportation-related permits and fees.

About $945 million (20 percent) of total revenue flowing through ODOT is distributed to Oregon cities, counties and other agencies. This leaves about $3.7 billion remains for ODOT’s 2017–2019 biennial operating budget and ending balance.

ODOT manages a $3.7 billion budget that funds programs related to Oregon’s system of highways, roads and bridges; railways; public transportation services; transportation safety programs; driver and vehicle licensing; and motor carrier regulation.

Highway Division accounts for about two-thirds, or about $2 billion, of ODOT’s 2017–2019 legislatively approved budget. The division spends its resources on maintaining the highway system, bridge and pavement preservation projects, adding capacity to highways, and bicycle/pedestrian projects among others.

Debt service on bonds, the second-largest spending category in ODOT’s budget, totals $555 million. Most of this debt service is paid by the State Highway Fund; some is paid out of lottery revenue.

Transportation Development Division has $172 million available for grant programs like ConnectOregon, transportation system planning, and data collection and reporting.

Central Services Division's budget of $230 million provides a variety of essential services to ODOT including financial management, information systems, human resources, and collecting fuels tax.

Driver and Motor Vehicle Services Division has a budget of $230 million. DMV licenses and regulates drivers and vehicles to promote safety and protect consumer interests through 60 field offices located throughout the state.

The Rail and Public Transit Division. Public Transit has $162 million available for communities and local transportation providers to help people with special needs, those in rural areas and intercity travelers. Rail Division has a budget of $70 million to regulate rail and crossing safety and to provide intercity rail service.

Motor Carrier Transportation Division uses its budget of $64 million to register and inspect trucks, enforce weight, size, and safety regulations, issue permits, and collect the weight-mile tax.

Transportation Safety Division's $38 million budget provides safety programs that address intoxicated driving, young drivers, use of safety belts, child safety seats and other programs.

The remaining $214 million of the budget is for construction reserves, capital construction and capital improvement projects, and carryover in programs like the Oregon Transportation Infrastructure Bank.

Federal Transportation Funding

The federal government provides revenues from federal fuels taxes and heavy truck taxes to states and local governments. Most federal funding is distributed to states and local governments by funding formulas.

Oregon receives about half a billion dollars in funding from the Federal Highway Administration each year for construction projects on the state’s roads, including the interstate, as well as planning and engineering. Some funds can also be used for transit and bicycle/pedestrian capital projects. All federal highway funds flow through ODOT. We distribute about 30 percent of those funds to local governments. Oregon also receives public transportation funding from the Federal Transit Administration.

State Highway Fund

Oregon’s State Highway Fund collects resources from three main sources:

  • Taxes on motor fuels, including gas tax and diesel tax.
  • Taxes on heavy trucks, including the weight mile tax and truck registrations.
  • Driver and vehicle fees, including licenses and vehicle title and registration.

Under the Oregon Constitution, State Highway Fund fees and taxes must be spent on roads, including bikeways and walkways within the highway right of way. State funds can be used for both construction projects and the day-to-day maintenance and operations of the state’s roads.

Formulas set in state statute distribute 40 percent of State Highway Fund revenues (after deducting the costs of collecting the revenue) to cities and counties.

Other State Funding

ODOT also receives revenue from several other state sources, including:

  • Lottery funds, including lottery bond proceeds directed to the ConnectOregon program.
  • Cigarette tax revenues dedicated to transit services for seniors and disabled people.
  • Custom license plate fees, dedicated to operating passenger rail.
  • General fund resources for senior and disabled transit and passenger rail service.
  • A variety of transportation-related permits and fees.

Keep Oregon Moving (HB 2017) passed by the 2017 legislature created a number of new revenue sources for transportation. These go into effect in 2018.

  • A 0.5 percent vehicle dealer privilege tax on new car sales will fund rebates for electric vehicles and provide ongoing funding for the multimodal ConnectOregon program.
  • A 0.1 percent employee payroll tax ($1 for $1,000 in payroll) will improve public transportation service in both rural and urban communities.
  • A $15 tax on the sale of new bicycles with tires over 26 inches and cost at least $200 will go to ConnectOregon for off-road bicycle and pedestrian paths that serve commuters.

 

The Statewide Transportation Improvement Program is ODOT's capital improvement program for state and federally-funded projects. ODOT and the Oregon Transportation Commission develop the STIP in coordination with a wide range of stakeholdrs and the public.

The current STIP includes two major multimodal categories of funding: Enhance and Fix-It. The Oregon Transportation Commission dedicated most funding to Fix-It projects.

The Enhance category funds projects or investments that enhance, expand, or improve the transportation system across multiple modes, including roads, bicycle, pedestrian, and public transportation.

The Fix-It category funds projects or investments that fix or preserve the state’s transportation system or improve its safety, including safety, bridge, pavement, culvert, and other projects.

The Commission approved the STIP for 2018-2021 and has begun development of the 2021-2024 STIP.

Multimodal and mode specific projects are funded through public transit grants, safety grants, the ConnectOregon program and other funding programs.

 

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