‘Budget pothole’: Oregon’s transportation funding challenge comes into clearer focus

Oregon lawmakers on the hunt for money to balance the state’s transportation budget offered a look Tuesday at the difficult math problem before them.

The goal: plugging a $242 million hole in the current Oregon Department of Transportation Budget, and finding about $46 million more to make sure the agency has a financial buffer.

There are few simple options.

Declining to fill 138 of ODOT’s hundreds of vacant positions could offer up $70 million in savings, but it would also mean the sprawling agency is without staff once deemed necessary. Deeper cuts explored by ODOT would slash even more unoccupied jobs, but also require laying off active workers – as many as 400 under the most draconian possibility floated by the agency. Lawmakers appear unlikely to go to such lengths.

“We are down almost 700 vacant positions,” Lisa Sumption, ODOT’s interim director, told lawmakers at a legislative hearing on the budget gap. “Everyone is carrying the workload of two or three people.”

Shifting money currently dedicated to ODOT programs and projects could yield money to pay for basic road upkeep, but will be unpopular with whichever constituencies count on that money.

Up for potential grabs as lawmakers scout for funds: money that pays for bicycle and pedestrian upgrades near schools, strengthens bridges to withstand earthquakes, helps build out electric vehicle charging stations, subsidizes the state’s passenger rail system, improves marine terminals and airports, and much more.

“The impact is you’re delaying projects,” Daniel Porter, administrator of ODOT’s budget division, told a legislative committee. “That’s the tradeoff we’re having to consider.”

One change that is likely to be an easy call? ODOT believes lawmakers can free up $85 million in state funding currently obligated to a host of highway projects lawmakers approved in 2017. Federal money would pay for the work instead.

What mix of cuts and funding shifts lawmakers ultimately choose will be answered later in this year’s one-month legislative session. Sumption and others stressed Tuesday there are few good options in an agency that has cut spending on nuts-and-bolts services repeatedly in recent budgets.

“We’re looking at a budget pothole that gets deeper every time a tire hits it,” said state Rep. David Gomberg, D-Otis, cochair of the committee that oversees ODOT’s budget.

Unionized ODOT employees and their supporters walked the halls of the Capitol on Tuesday to make the case that lawmakers should salvage agency jobs.

The state’s road funding quagmire is the product of a political drama that has immersed the Capitol in the last year.

With ODOT’s revenues unable to keep pace with agency expenses, Oregon lawmakers spent much of last year working toward an ambitious funding package that could set the agency up for nearly a decade. That bill failed, forcing Democrats to scramble to pass a stop-gap funding bill in a hastily called special session.

That bill, House Bill 3991, included a 6-cent increase to Oregon’s 40-cent-per-gallon gas tax, substantial hikes to vehicle registration and titling fees, and a temporary doubling of a tax that funds public transit. But Republicans uniformly opposed the bill, arguing ODOT should better prioritize its existing money rather than look for more.

A GOP-led effort gathered enough signatures to put the tax and fee hikes before voters for approval. They are blocked until that vote occurs – either in November or May – meaning ODOT has a funding gap.

Gov. Tina Kotek has said she will lead a fresh effort to pass a transportation funding package next year. In the meantime, the Democrat has offered only one line in the sand to lawmakers looking for cuts: She won’t touch state funding that helps prop up public transit agencies statewide.

That funding, roughly $137 million per year, has been a focus of Republican lawmakers as they look for ways to shift money in the state’s transportation budget.

Meanwhile, others are offering ideas for places lawmakers can look. Move Oregon Forward, a coalition of progressive groups, has offered a “cheat sheet” to legislators that includes options that weren’t included in ODOT’s proposal on Tuesday.

Among them, the coalition suggests ODOT take on short-term debt to close the budget gap. It also proposed redirecting money currently set to go toward a stalled proposal to widen and cap Interstate 5 as it travels through Portland’s Rose Quarter.

“This is not a zero-risk proposition,” said Indi Namkoong, the transportation justice coordinator at the environmental nonprofit Verde, who helped create the proposal. “There’s risk any way we move here… We have to look at what is the least harmful path out of this situation.”

The transportation funding gap is only one budgetary puzzle lawmakers are trying to solve this legislative session. A separate question is how the Legislature can fill a roughly $650 million hole in the state’s general fund budget, which does not go toward roads or other transportation system needs.