The Oregon Department of Transportation (ODOT) is facing a significant funding crisis due to declining gas tax revenues, inflation, and legal restrictions on how funds can be used. The department has warned that unless new funding sources are found or there is increased flexibility in using current funds, it may be forced to carry out what could become the largest layoff in Oregon state government history. Service reductions for travelers, freight haulers, and DMV customers could begin as early as September 16.
Federal highway funds make up part of ODOT’s budget but are generally limited by law to infrastructure improvement projects. Similarly, the Oregon Legislature allocates most state highway funds to construction work and debt service for bonds issued under past transportation packages. According to ORS 367.095, nearly all additional money provided through HB 2017—the last major transportation package passed in 2017—must go toward construction projects, leaving only about 6% available for operations and maintenance.
“Only new funding or having the flexibility to use existing funding in new ways can prevent layoffs and service reductions for travelers, freight haulers, and people waiting in line at DMV,” according to ODOT.
The agency warns that these cuts will impact safety and reliability across Oregon’s transportation system.
