New Transportation Revenue for Oregon’s Transportation System
On Nov. 7, 2025, Gov. Tina Kotek signed House Bill 3991 into law, which was intended to provide emergency funding for Oregon's roads, bridges and transit operations at the state and local level.
The law also sought to modernize how Oregon pays for transportation.
Most of the fee and tax increases in the bill are now delayed, pending a vote on the Ballot Measure 120. For more information, see the Explanatory Statement here.
However, some parts of House Bill 3991 are already in effect and not subject to the vote, including accountability measures and a $30 increase in supplemental registration fees for 40+ mpg vehicles. Additionally, a mandatory per-mile road usage charge will begin July 1, 2027for existing electric vehicles, followed by new EVs and hybrids/plug-in hybrids the following year.
Addressing Oregon’s Transportation Funding
The state relies on revenue from the gas tax and fees on vehicles and freight haulers to fund the maintenance, operation and safety of our roads and bridges. These funds are collected into the State Highway Fund, which then distributes money to ODOT, counties and cities across the state to plow roads, pave and fill potholes, improve safety and more.
Because Oregonians are driving increasingly fuel-efficient vehicles and switching to electric vehicles at a high rate, gas tax revenues have flattened and are projected to decline in coming years.
In addition to flattening gas tax revenues, current inflation means that each dollar collected buys less. This combination makes it impossible for ODOT to keep up with the cost of maintaining and improving our transportation system. Unlike many other states, Oregon's gas tax and other vehicle fees aren't tied to inflation.
Without most of the funding envisioned in HB 3991, ODOT faced a large funding gap for the 2025-2027 budget cycle. During the 2026 legislative session, lawmakers passed two bills to avoid layoffs and deep service cuts at ODOT, addressing a $297 million budget shortfall for the agency's maintenance and operations work. This required some reductions and redirecting existing funds from state transportation programs and projects. While this legislative action stabilizes operations for the remainder of the current budget cycle, it does not resolve the underlying funding challenges facing Oregon's State Highway Fund.
Since 2019, ODOT has reduced spending by more than $500 million to stay within available funding. These cuts have helped manage costs and prioritize critical services in the short term. But continued underfunding will affect services Oregonians rely on every day — like plowing snow, patching potholes, clearing landslides, repairing bridges and crosswalks, providing emergency response, serving people at the DMV, funding public transportation, improving safety and much more.
Building a Vision for the Future
Governor Tina Kotek is convening transportation experts, system users, and advocates from across the state and political spectrum to build an achievable and comprehensive vision for Oregon's transportation system. Building on prior state and legislative work, the Rebuilding Our Transportation Vision Workgroup will review transportation needs, funding challenges, priorities, and tradeoffs and provide recommendations to inform action in the 2027 legislative session. Recommendations will focus on affordability, accountability, safety, and economic vitality.
Sign up for meeting and Workgroup updates here.