Structural Revenue Difficulties
Due to a structural problem with how our transportation system is funded, Oregonians may soon see declines in the transportation system.
Oregonians may see more potholes and ruts on roads and may spend more time waiting for roads to reopen after a crash because there are fewer ODOT responders. During winter, there will likely be an increase in snow and ice build-up, more chain requirements, longer delays, and more road closures.
Every transportation agency across Oregon, whether state or local, relies on the gas tax to some degree. Transportation agencies across the country are grappling with flatlining and declining fuels tax revenues as cars become more efficient and drivers make the switch to electric vehicles.
Burning less gas is great news for the environment. Oregonians making the switch to more fuel efficient, hybrid, and electric vehicles is a central reason why Oregon is on track to reduce carbon emissions from transportation by 60 percent by 2050. However, the transportation system is primarily funded by a tax on gasoline consumption, resulting in an increasingly unfunded transportation system.
Funding from recent federal and state infrastructure packages allowed ODOT to make improvements to the system. But those packages did not provide substantial funding needed to support critical ongoing maintenance and employees who respond to emergencies, staff dispatch centers, or perform other jobs that help keep the system running smoothly. We’re not able to shift money specifically dedicated to projects or programs to cover such work.
At the same time, material costs have gone up dramatically during the last few years of high inflation and labor costs have also risen significantly.
ODOT has taken a number of steps to balance our budget, including:
Restricting maintenance recruitments;
Deferring road and bridge maintenance, including pavement repair and painting;
Reducing winter maintenance service levels; and
Scaling back after-hours response efforts, including roadside assistance.
Resources including fact sheets and maps on the expected impacts of these service level reductions for each region of Oregon are noted below. We will continue to update these as needed.
We are prioritizing safety, and focusing our efforts on work with the biggest outcomes for the most people. ODOT is dedicating more resources to keeping travelers safely moving on key corridors and fewer resources on less-traveled roads.
We’ve consolidated offices and shifted more DMV services online. We’ve closed maintenance stations, reduced staff, combined crews, and deferred building maintenance on ODOT facilities over the past 11 years. However, cuts alone will not solve long-term funding needs.
There are a number of different ways to solve this structural funding issue. Options may include expanding ODOT’s pay-per-mile, or Road Usage Charge (RUC) program. Revenue could also be raised through registration or other vehicle fees, or the gap could be filled with funding from non-transportation sources. And while the gas tax won’t last forever, increasing or indexing it for inflation would help cover the cost of maintaining the system.
We look forward to working with our partners to identify and adopt sustainable funding solutions for our transportation system at the state and local level.
ODOT receives funding for specific purposes from payroll tax, cigarette tax revenues, general funds, lottery funds, and a variety of transportation-related permits and fees. ODOT will receive about $5.9 billion for our operating budget during the 2023-2025 biennium. An additional $1.4 billion will flow through ODOT to be distributed to Oregon cities, counties and other agencies.
ODOT pumps brakes on two major freeway projects amid budget tolling pause (Oregonian)
ODOT cuts service and maintenance capacity across the board as Oregon braces for winter (Elkhorn Media)
ODOT says: DMV expands online offerings | Keep Oregon Moving | (biztrib.com)
ODOT: The gas tax is fading away and taking maintenance down with it | Keep Oregon Moving | (biztrib.com)