Weeks after the 2025 legislative session ended with lawmakers failing to pass a transportation budget, Gov. Tina Kotek called for a special session to address a $350 million funding shortfall that the Oregon Department of Transportation, or ODOT, said could threaten road safety and routine maintenance projects.
The special session will be held August 29 with goals to fill a funding gap that spurred ODOT to announce the layoff of hundreds of employees, jeopardized numerous improvement projects and threatened basic services like plowing snowy highways.
The session will be used to address the “critical near-term solutions to stabilize basic functions at ODOT and local governments,” Kotek said in a statement.
While Kotek did not specify how the issues would be addressed, she did express her confidence in lawmakers to “step up” and approve necessary funding for the state’s transportation needs.
“I appreciate their partnership and am eager to be on the other side of this crisis,” Kotek said.
Impending layoffs
Early this month, ODOT informed nearly 500 state employees that they would soon lose their jobs. The planned layoffs affected nearly 10% of the department’s workforce — with more expected in early 2026, if lawmakers don’t find additional funding.
On July 22, Kotek paused the layoffs. She ordered the start date for layoffs announced earlier this month to be postponed 45 days with the hope the layoffs can be canceled after lawmakers allocate more funds during the special session. If not, the postponement will also allow impacted people the time to “make contingency plans,” she said.
With 483 ODOT workers notified of their imminent departure, the department did not announce clear parameters for who would be impacted by cuts, leaving many employees feeling blindsided and unsure whether their jobs are safe.
ODOT Director Kris Strickler later announced in an all-staff email that layoffs were determined by “job classification, location and seniority.”
On its website, ODOT said some employees who received notice include maintenance crews, support staff, managers and critical operational roles across the state.
Adding to the confusion, some union-represented employees who received layoff notices can elect to defer their layoff to another worker who has less seniority, leaving the more senior worker still employed. Because of this, non-union employees who did not originally receive layoff notices could still be at risk of losing their jobs.
ODOT said it will have to cut a total of 932 jobs as a result of the current budget crisis — 449 of these positions are currently vacant. As of 2024, ODOT employed more than 4,700 people.
In his July 15 email outlining criteria for layoffs, Strickler acknowledged that “the full impacts to specific regions, programs, and services may not be fully known for several months.” That leaves both workers and communities in the dark as to what will be most affected.
“This is not business as usual,” Kotek said in a statement July 7. “These layoffs constitute an emergency in Oregon’s transportation system that will hurt every part of Oregon.”
ODOT workers, especially those who do not have seniority, remain at risk of losing their jobs. Workers across the state are impacted in all regions in Oregon. Kotek seemed optimistic about the possible reversal of the layoffs. But for now, they remain an imminent reality for hundreds of Oregonians.
Areas of immediate impact
Without the passage of a transportation budget, road safety, improvements and planned projects are at risk, according to ODOT.
With fewer crews and limited resources, Oregonians across the state will soon feel the impact of these cuts, the department said. That could range from delays in pothole repairs to slower and less frequent snow and ice removal in the winter.
People in rural and mountainous regions will feel the cuts the most, ODOT said, due to fewer workers covering more miles of roadway. This may cause harmful and dangerous road conditions in the winter and unsafe roads in need of repairs after the cold season.
Rural communities already face challenges when accessing ODOT services, due to more remote areas with difficult access to roads.
In parts of the Oregon Coast, a single road connects one community to another. When natural disasters like landslides occur, there can be delays in emergency response to more isolated locations. These issues are predicted to become greater with fewer employees and less state funding.
“Safety remains ODOT’s top priority,” the department said on its website. “But with fewer crews and supplies, responses will be slower, sometimes dramatically so.”
The city of Portland could also see quick impacts. With the city’s transportation bureau expecting $11 million in state funding to go towards maintenance and operations, the city says that many things — including an estimated 300 streetlights — could go unrepaired this year.
In Multnomah County, the state’s most populated area, nearly half the roads need to be rebuilt or replaced, county officials said. Drivers in Oregon may also find longer and more frequent road closures.
ODOT released a list of services and projects that it has cut or reduced as a result of the budget deficit. These include the maintenance of state park public roads and parks used as rest areas, more than 120 miles of chip seal projects that aim to improve pavement quality and durability, an inability to replace equipment through the next biennium, edge lines in low volume roads not being repainted and many other things Oregonians rely on.
Oregon’s bus systems and transit also face uncertainty.
A Democrat-led bill proposed during the legislative session aimed to bump taxes taken from Oregonians’ paychecks to fund transit, largely TriMet bus and light rail services. The bill died in committee. While many transit companies aren’t fully reliant on state funds, they are already struggling to secure adequate funding.
TriMet released a statement saying that without new state funding, its bus services could be cut by 25% and light rail by 10% by 2032.
Kotek made clear that when lawmakers come together later in the summer, their top priorities would be to address these critical safety issues. Until then, it remains unclear how staffing and safety improvements could be impacted in the coming years.
Part of a larger funding issue
While the 2025 legislative session did not help ODOT’s budget crisis, additional factors set the stage for the agency’s current predicament.
The State Highway Fund has been in place for decades and relies on a gas tax placed across Oregon as well as fees on vehicles and freight haulers to support transportation agencies across the state. However, that fund is no longer sufficient to support the “maintenance, operation and safety” of its department, ODOT said.
In recent years, Oregonians have been increasingly switching to fuel-efficient vehicles and electric vehicles.
“This is good as it will drive carbon emissions from transportation down 60% over the next 25 years,” ODOT said. “But with increased fuel efficiency and more EVs, Oregon sees lower tax revenues and less money available to maintain the transportation system.”
With the overall decrease in the gas tax revenue in recent years, ODOT is seeing reduced funding for its services. This reduction, paired with high inflation rates that make transportation systems more expensive, has increased ODOT’s deficit. The gas tax is stagnant, but goods and services are not. So funding doesn’t line up the same as it used to.
“With every year that passes, the same dollar purchases fewer materials and less services,” according to ODOT.
Failure at the end of the session
During the 2025 legislative session, Democratic lawmakers put forward a widely encompassing transportation bill that would have raised taxes on vehicle sales, increased the gas tax by 12 cents per gallon and increased multiple other taxes and fees to funnel more money to ODOT and its programs.
That was House Bill 2025, which died when the legislature adjourned. In the final days of the session, it became clear that the price tag of $11.6 billion over the next decade was too high for the bill to pass.
On June 27, Democratic lawmakers scrambled to pass a substitute bill. They proposed an increase to the state’s current 40-cent-per-gallon gas tax by 3 cents. This increase would have solely filled ODOT’s funding gap.
But it didn’t work. Lawmakers couldn’t pass the tax increase and adjourned two days early with no transportation budget.
Kotek spoke the day after the adjournment. She sounded angered by the early dismissal and hinted at calling a special session.
“I don’t care how tired you are, I don’t care what your vacation plans are, we are going to solve this,” Kotek told lawmakers in a June 28 press conference. “You’re going to be spending a lot more time with me. We need to get this figured out.”
Proposals to be considered in the special session
With just under a month since the adjournment, both the governor and Democratic lawmakers have been working to find a solution to pass during the special session next month.
In a press conference July 23, Kotek outlined her proposal for lawmakers to consider when they meet at the end of August.
While her office has not released the details, Kotek told reporters her plan includes a 3-cent increase in the state’s gas tax, which is estimated to raise about $150 million a year. It also includes an increase in vehicle and title registration fees and doubles the payroll tax currently taken out of Oregonians’ paychecks to fund transit. Currently, the payroll transit tax is set at 0.1%.
Another element of Kotek’s proposal includes a new requirement for drivers of electric and hybrid vehicles to enroll in the state’s OReGo program, which charges drivers for the miles they drive.
A formal analysis of the amount Kotek’s plan could raise was not announced during the conference. However, OPB reported that a spokesperson said in a text message that it would be roughly $650 million over the next biennium.
The ultimate outcome remains unclear. But for now, layoffs at ODOT are on hold while lawmakers work on ways to make up for a $350 million funding deficit.
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This article appears in July 30, 2025.