In the wake of the regular 2025 legislative session ending without passage of a transportation-funding plan, the Oregon Legislature held a special session to address a budget shortfall at the Oregon Department of Transportation (ODOT). The department had projected a $300 million deficit for the upcoming biennium, prompting warnings of layoffs and service reductions. To address the shortfall, Governor Tina Kotek convened the special session to pass a transportation funding plan.
On September 1, the Oregon House approved a transportation tax and fee package, moving the measure forward after several false starts during the regular session. The proposal included a six-cent per gallon increase in the gasoline tax, higher vehicle registration and title fees, and a temporary doubling of the payroll tax for public transit. The plan was structured to raise approximately $4.3 billion over the next decade for road maintenance and operations.
The Senate vote was delayed multiple times during the special session. Initially postponed due to a key senator’s health issues, the vote was eventually scheduled for the week of September 29. After several weeks of waiting, the Senate passed House Bill 3991 with an 18-11 party-line vote.
The approved package includes:
- Gasoline tax increase from $0.40 to $0.46 per gallon, effective January 1, 2026
- Increased vehicle registration fees for passenger vehicles
- Higher title fees for passenger vehicles
- Doubling of the payroll tax for public transit from 0.1% to 0.2% until 2028
- Registration surcharges for electric and highly fuel-efficient vehicles, and a phased-in road usage charge for electric vehicles by 2031
The Senate’s approval temporarily averted the planned layoffs at ODOT, ensuring continued staffing and operations. The bill currently awaits the governor’s signature.
Republican lawmakers have signaled their intention to pursue a referendum on elements of the package, including the gas tax and fee increases. To qualify for an election, they will need to gather 78,000 valid signatures within 90 days.
