House Bill 3991

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 we pay for transportation in Oregon and to strengthen the health of ODOT. 

Most of the fee and tax increases in the bill are now delayed, pending a vote at an upcoming statewide election. 

However, starting Dec. 31, 2025, Oregonians will see some cost increases to support Oregon’s transportation system. Vehicles with 40+ mpg will see a $30 increase in supplemental registration fees. Additionally, a new mandatory per-mile road usage charge will begin on July 1, 2027 for existing electric vehicles, followed by new EVs and hybrids/plug-in hybrids the following year. 

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 services and supplies. 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 is facing a large funding gap for this biennium. This funding gap will necessitate service reductions and potentially staff layoffs. ODOT is working closely with the Governor’s Office as they engage lawmakers and community leaders to find a path forward. 

ODOT has taken voluntary reductions of more than $300 million over the past six years to stay within available funding, and the Oregon Legislature adopted a budget in June 2025 that cut an additional nearly $50 million from this biennium’s budget. The agency will continue to operate under an austerity budget for the foreseeable future.