Politics

Oregon Democrats’ major transportation bill is dead

By Dirk VanderHart (OPB)
June 27, 2025 6:48 p.m. Updated: June 27, 2025 7:53 p.m.

The party was scrambling Friday to come up with a modest alternative to its multi-billion dollar road funding bill.

FILE- In this photo from January 2022, stretches of Highway 101 like this have been abandoned.

FILE- In this photo from January 2022, stretches of Highway 101 like this have been abandoned.

Kristian Foden-Vencil / OPB

Oregon Democrats’ ambitious transportation funding bill is dead, a stinging defeat for the majority party on its most pressing goal of the 2025 session.

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According to four sources within the Legislature, Democrats acknowledged Friday morning they do not have the votes to pass House Bill 2025. The sweeping bill would have hiked an array of taxes and fees in order to generate billions for much-needed road projects.

But the bill was opposed by almost every Republican, and generated crucial opposition among some key Democrats. It’s now expected to be sent back to committee rather than receive a vote in the House.

The question Friday was what the Legislature might do to raise a fraction of the money they’d initially sought.

An amendment posted Friday morning to a separate bill, HB 3402, would institute a three-cent increase to the state’s existing 40-cent-per-gallon gas tax in order to find some new funding for road projects — modest compared to the 12- and 15-cent increases that had been considered. It would also hike some registration and titling fees.

A revenue analysis sent to lawmakers Friday suggested the proposed amendment would raise around $315 million in the upcoming budget cycle, and $2 billion over the next decade.

But crucially, that money would go solely to the Oregon Department of Transportation, rather than splitting the new revenue with cities and counties as is typical for transportation funds.

That twist was a way to ensure dire layoffs don’t impact the state’s transportation agency. Without an influx of roughly $350 million in the next budget, ODOT has said it will eliminate hundreds of positions.

Gov. Tina Kotek, who’s been largely absent from the public debate over transportation funding, urged a House committee on Friday evening to pass the proposal.

“Without the revenue, I will need to lay off 600 to 700 workers who provide essential services right now,” Kotek said, adding that layoffs would begin Monday if a bill isn’t passed. “That would be one of the largest layoffs in Oregon history.”

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But the suggestion of rescuing ODOT while leaving county and city road departments to languish infuriated some of the groups who’d been most enthusiastic about new transportation money.

Mayors like Beaverton’s Lacey Beaty and Portland’s Keith Wilson testified in opposition of any change that would cut out money for cities. Wilson said the lack of new funding would “jeopardize dozens of essential city jobs” and ensure hundreds of street lights are not prepared.

The apparent demise of HB 2025 leaves plenty of questions for the future of road funding in Oregon — questions that will have to wait until after session.

The bill included funding increases for transit agencies that have struggled with rising costs and lower ridership. It would have set aside hundreds of millions each biennium to help cover the costs of two unfinished highway megaprojects— one on Interstate 5 through Portland’s Rose Quarter and another to bolster the Abernethy Bridge on Interstate 205. And it would have set the state on a path toward more sustainably funding road projects, requiring drivers of electric vehicles to pay for miles they drive.

News of the transportation bill’s demise gave a somber air to many Democrats Friday. Democratic members of the House met behind closed doors for hours in the afternoon as they planned how to respond to the death of a signature proposal.

Republicans, who nearly all opposed the transportation plan, were chipper. They pressed Democrats to scrap any plans for raising taxes in order to tackle the problem another time.

“The alleged failure of HB 2025 gives us a chance to reset the deck,” said state Rep. Shelly Boshart Davis, R-Albany.

Democrats dominate both of Oregon’s legislative chambers this year with three-fifths supermajorities — exactly enough seats to pass new taxes on their own. But some in the party balked at OKing steep new taxes on their constituents.

The opposition led to a scramble earlier this week, when Democratic leaders moved HB 2025 back to committee in order to scale back its ambitions. But even the revamped bill met headwinds.

In the Senate, Democratic state Sen. Mark Meek was stalwartly opposed to the bill. And while at least one House Republican signaled some support, it wasn’t ultimately clear HB 2025 could have cleared that chamber, either.

Lawmakers have been working since last year to figure out a way to sustainably inject funding into road maintenance at the state and local level. They say that existing revenue streams, such as the gas tax, have failed to rise with inflation – and are likely to dwindle as electric vehicles become more prominent.

Meanwhile, cities and counties warn that many of their roads are falling deeper and deeper into disrepair.

This is a breaking news story and will be updated.

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