Exactly one month after they convened to pass a road funding bill, Oregon Democrats finally crossed the finish line Monday.
The state Senate passed a package of tax and fee increases proposed by Gov. Tina Kotek by an 18-11 party-line vote — the bare minimum support to pass a tax increase.
That result relied on the presence of state Sen. Chris Gorsek, a Gresham Democrat who had been unable to make it to the Capitol throughout September. Gorsek was hospitalized last month with complications following a recent surgery. He was pushed into the Senate chamber in a wheelchair to vote Monday, but left the room during lengthy debates over the proposal.
The passage of Kotek’s funding package, House Bill 3991, offers a lifeline to hundreds of employees at the Oregon Department of Transportation threatened with layoffs if the agency didn’t get around $300 million more in the current budget.
But the bill may still have hurdles ahead.
Republicans have said they will work to get tax increases in the bill referred to voters in the November 2026 election. That would require opponents to collect around 78,000 signatures over the next three months, a pricey endeavor that GOP lawmakers suggested Monday would be worth the cost.
“We stand squarely with Oregon taxpayers. The majority does not,” Senate Minority Leader Bruce Starr, R-Dundee, told reporters. “If this gets referred to the ballot, it’ll be on the same ballot that every Democrat that voted for it is going to be on. They’ll have to defend this indefensible act.”
A successful referral campaign would suspend new taxes until a vote is held next year, throwing the fate of ODOT services back into uncertainty. Along with layoffs, the agency has warned it will need to dramatically scale back services like road plowing without more money, making winter roads less safe.
For the time being, Democrats are celebrating the bill’s passage.
“With this legislation, we are averting an immediate transportation safety crisis and doing our part to keep Oregonians safe on the roads,” Senate President Rob Wagner, D-Lake Oswego, said after the bill’s passage.
Among its provisions, HB 3991 will:
- Raise the state’s 40-cent-per-gallon gas tax to 46 cents beginning in January. That change is expected to raise around $90 million per year.
- Hike vehicle title and registration fees that Oregon motorists pay. Registration fees would increase by $42, and titling fees by $139. Electric vehicles, which do not pay gas taxes, would be required to pay an additional $30 on top of existing fees.
- Double the payroll tax that currently takes 0.1% out of workers’ paychecks to support public transit. The increase was initially expected to be ongoing, but Democrats agreed to limit it to two years under pressure from Republicans.
- Require drivers of electric vehicles and hybrids to enroll in the state’s OReGo program, which charges drivers for miles driven. Such a shift is considered necessary for funding road projects as EVs continue to gain popularity and gas tax revenue is expected to decline.
- Require more frequent auditing of the Oregon Department of Transportation so lawmakers have better insight into the progress and cost of major road projects. Those accountability measures are a response to backlash over huge cost increases of ODOT projects.
- Eliminate existing statutory language requiring tolling for some highway projects. That language has caused heartburn for some lawmakers, even though Kotek paused tolling plans last year.
- Simplify the state’s “weight-mile” system of taxing heavy trucks, a change crucial in getting freight interests on board with the bill.
The bill is expected to raise $4.3 billion in new tax revenue in its first decade. That money has been at the center of debate over HB 3991.
Democrats have argued that the state cannot move forward without a tax hike. They have warned of unacceptable service lapses, crumbling roads, and a host of other negative outcomes if Kotek’s bill didn’t pass.