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Transportation Funding in Oregon

Overview

The Oregon Department of Transportation will collect just over $5.1 billion in total revenue during the 2021-2023 biennium.

  • 23 percent from the federal government.
  • 77 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 $1 billion (19 percent) of total revenue flowing through ODOT is distributed to Oregon cities, counties and other agencies. This leaves about $3.94 billion remains for ODOT’s operating budget and ending balance.

ODOT manages a $5.1 billion budget (HB 5542) 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.

Delivery & Operations accounts for about two-thirds, or about $3.2 billion, of ODOT’s 2021–2023 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 $561.3 million. Most of this debt service is paid by the State Highway Fund; some is paid out of lottery revenue.

Policy, Data & Analysis Division has $198.6 million available for grant programs like Connect Oregon, transportation system planning, and data collection and reporting.

Support Services Division's budget of $176.5 million provides essential services to ODOT including procurement, information systems and human resources.

ODOT Headquarters budget of $61.9 million provides leadership and management to the agency and vital services and accountability to partners and the general public. Program areas include Social Equity, Civil Rights including the ESB program, Government Relations and Communications. 

Finance & Budget Division's budget of $50.9 million provides essential services to ODOT including financial management, budget, revenue forecasting and collecting fuels tax.

Driver and Motor Vehicle Services Division has a budget of $258.6 million. DMV licenses and regulates drivers and vehicles to promote safety and protect consumer interests through 60 field offices located throughout the state.

The Public Transporation Division and Rail Program: Public Transit has $336.6 million available for communities and local transportation providers to help people with special needs, those in rural areas and intercity travelers. Rail Program has a budget of $71.7 million to regulate rail and crossing safety and to provide intercity rail service.

Commerce and Compliance Division uses its budget of $85.6 million to register and inspect trucks, enforce weight, size, and safety regulations, issue permits, and collect the weight-mile tax.

Transportation Safety's $39.2 million budget provides safety programs that address intoxicated driving, young drivers, use of safety belts, child safety seats and other programs.

The remaining $68.1 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.

HB 2017 (2017) Transportation Funding Package passed by the 2017 legislature created a number of new revenue sources for transportation.

  • 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. This tax goes into effect July 1, 2018.
  • A $15 tax on the sale of new bicycles with tires over 26 inches and cost at least $200 will go to Connect Oregon 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 stakeholders and the public.

The Commission allocates funding among the following major categories:

  • Fix-It programs fund projects that fix or preserve the state’s transportation system, including bridges, pavement, culverts, traffic signals, and others. ODOT uses data about the conditions of assets to choose the highest priority projects. In recent STIPs the Commission has allocated most funding to Fix-It programs.
  • Enhance programs fund projects that enhance or expand the transportation system. Area Commissions on Transportation recommend high-priority investments from state and local transportation plans in many of the Enhance programs.
  • Safety programs reduce deaths and injuries on Oregon’s roads. This includes the All Roads Transportation Safety program, which selects projects through a data-driven process to ensure resources have maximum impact on improving the safety of Oregon’s state highways and local roads.
  • Non-highway programs fund bicycle and pedestrian projects and public transportation. Area Commissions on Transportation often help recommend these projects to the Commission.
  • Local government programs direct funding to local governments so they can fund priority projects.

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

 

 

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