State of the System - Funding

Explore State of the System Topics

Transportation Funding

ODOT's budget is about $6 billion over two years. About a third comes from the federal government and the rest from state government. The Oregon State Legislature must approve our budget and most of our funding is directed by law to specific uses and can't be moved around. For example, we face a major shortfall in funding for day-to-day maintenance on our roads—like plowing snow and patching potholes—because almost all new revenue, particularly federal funds, is required by law to be spent on construction projects. Many things impact ODOT's performance and one of the main factors holding us back is a lack of funding.

Oregon's transportation funds are insufficient

We are doing our best with the available resources and are seeking new, long-term funding streams for the future. To achieve our goals in the Oregon Transportation Plan, we need significantly more funding than we currently have.

Costs for road maintenance have gone up and increased drastically for construction in the last decade.
Revenue from the gas tax — which goes into our State Highway Fund — has plateaued and is predicted to decline in the coming years.
Major transportation taxes and fees are set at flat rates that don't change with inflation, meaning they buy less and less every year.

If Oregon's gas tax of $0.24 per gallon in 1993 had kept up with inflation to 2023 it would be $0.51 - instead of our actual rate of $0.40 per gallon. That $0.11 is a difference of $250 miilion in annual revenue (in 2023 dollars).
Across the US, there are 24 states that adjust their gas taxes to rising costs.

The Transportation Funding Needs document shows the most urgent funding needs for State Highway Fund investments - including core service functions like maintenance and DMV, as well as safety investments needed to address increases in traffic deaths.

A stacked line chart comparing the consumer price index to the construction cost index. Between 2013 and 2017 construction inflation averaged 5% higher than consumer inflation. Between 2018 and 2020, construction inflation averaged 8% higher than consumer inflation. Between 2021 and 2023 construction inflation averaged 14% higher than consumer inflation. Future construction inflation is expected to continue this pattern.

A stacked line chart forecasting gross state highway funds and inflation adjusted gross state highway funds from Fiscal Year 2023 to Fiscal Year 2033. Inflation adjusted gross state highway revenue is expected to decline in the coming years.

Revenue Forecasts, Updated 10/2024

To submit a question or comment:

Ask ODOT button - Click to visit the Ask ODOT form

Strategic Action Plan Progress Report

Secure Sufficient and Reliable Funding

2024-2028 Strategic Actions

2024 - Develop an analysis of long-term funding needs for the transportation system and agency focused on maintenance and agency operations, safety, equity, climate, road preservation and multimodal transportation.

2024 - Develop revenue options that will provide sufficient and reliable funding by shoring up existing revenue streams and implementing new revenue sources like road usage charging.

2024 - Work with legislators and partners to engage the public to understand transportation funding and investment, including investment needs, gaps between available revenues and investment needs, challenges and opportunities with revenue sources, and consequences of disinvestment.

2024 - Identify further budget management strategies that allow ODOT to operate within available resources in the absence of additional funding.

2025 - Continue developing the OreGO road usage charge program in preparation for legislative action.

2025 - Review outcome of legislative transportation funding package to determine next steps.

2025 - With available funding, invest strategically to advance key transportation outcomes such as safety, mobility, and more.

2025 Efforts

Follow up on legislative outcomes.
Develop the process for identifying potential projects through the Capital Investment Plan.
Establish Capital Investment Plan goals and metrics.