State of the System - Funding

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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 2025 it would be $0.56 - instead of our actual rate of $0.40 per gallon. That $0.16 is a difference of $278 million in annual revenue (in 2025 dollars).
Across the US, there are 24 states that adjust their gas taxes to rising costs.

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 2021, construction inflation averaged 9% higher than consumer inflation. Between 2022 and 2025 construction inflation averaged 13% higher than consumer inflation. Future construction inflation is expected to continue this pattern.

Source: ODOT Finance Office, Updated 05/2026

A stacked line chart forecasting gross state highway funds and inflation adjusted gross state highway funds from Fiscal Year 2024 to Fiscal Year 2034. Inflation adjusted gross state highway revenue is expected to decline in the coming years.

Source: ODOT Finance Office, Revenue Forecasts, Updated 05/2026

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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.

Current Efforts

Following up on legislative outcomes.
Developing the Capital Investment Plan to replace the three-year STIP process and provide more precision in cost estimation and flexibility with budgetary and other changes. Included: Establishing goals and metrics and developing process to identify projects to fund and screen, aligning with federal funding obligation targets, geographic balance, readiness and other factors. Developing the process for identifying potential projects through the Capital Investment Plan.