Oregon Senate passes $4.3 billion transportation package

This is a developing story and will be updated.

The Oregon Senate on Monday in a 18-11 vote passed a long-awaited transportation bill that would update the state’s funding sources for road maintenance and operations.

House Bill 3991 would raise about $4.3 billion over the next 10 years to fund road maintenance and operations by raising the gas tax by six cents, nearly doubling most vehicle registration fees and doubling the payroll tax used to support public transit from 0.1% to 0.2% of a paycheck  — among other fee hikes for electric vehicles. Gov. Tina Kotek is expected to sign it. 

Within the first 25 minutes of floor debate, Senate Republican Leader Bruce Starr, R-Dundee, attempted to block the bill from moving forward by offering two amendments, one which would have freed up existing funds within the Oregon Department of Transportation budget and allowed the agency to direct it to immediate needs, and another amendment that would have given Oregon voters the final say on whether to approve or reject the bill in the November 2026 general election. Both motions failed. 

Senate Republicans then requested a caucus meeting, during which they held a press conference to explain the amendments.

Starr said Republicans don’t want roads to deteriorate or for transportation employees to lose their jobs, criticizing Gov. Tina Kotek and Democrats for not collaborating on a bipartisan transportation solution. He said Republicans will work to create a referendum, or allow Oregon voters to reject or approve the legislation in the November 2026 election. 

Sen. David Brock Smith, R-Port Orford, said many of his constituents can’t afford the tax and fee hikes in the transportation bill. 

“It’s going to hurt my rural Oregonians more because they have lower income levels and have to drive farther for goods and services than anywhere else, and they’re not driving a fuel efficient vehicle to do so,” he said at the conference. 

Oregon Democrats during the floor debate expressed support for the bill. Some called the bill a good start, with others even calling it insufficient. 

“It does not reduce greenhouse gas emissions, it does not address seismic vulnerabilities, and it does not reflect the testimonies calling for clean air and reliable transit,” said Sen. Courtney Neron Misslin, D-Wilsonville. “So yes, I am disappointed… but I’m certainly voting yes because this bill is necessary to keep essential services of transit.” 

How did we get here? 

The last time Oregon passed a major transportation bill was in 2017. Today, the Oregon Department of Transportation is facing significant budget shortfalls driven by declining tax revenue, inflation and spending restrictions. Without new ways of adding revenue, the department will have to lay off almost 500 workers and scale back essential services like road maintenance, snow removal, customer support and highway and graffiti cleanup. 

Lawmakers failed to compromise on a transportation bill during the regular six-month legislative session, so Kotek called for a special session over Labor Day weekend to address the budget shortfall. 

The Oregon House passed the bill on Sept. 1, but a Senate vote was postponed twice because Sen. Chris Gorsek, D-Gresham, was recovering from surgery and Democrats needed his vote for the bill to pass.

Kotek has delayed the Oregon Department of Transportation from laying off its workers twice in anticipation of passing a bill in the special session. Originally slated to happen in July, then Sept. 15, agency layoffs are now set to take effect on Oct. 15 unless the bill passes. 

What’s in the proposed transportation package? 

The bill would raise taxes and fees, including:

• A gas tax increase from $0.40 to $0.46, effective Jan. 1, 2026.
• An increase in annual registration fees from $43 to $85 for passenger vehicles; $63 to $105 for utility vehicles, light trailers, low-speed vehicles and medium-speed electric vehicles; and $44 to $86 for mopeds and motorcycles. 
• Increasing title fees for passenger vehicles from $77 to $216
• Doubling the payroll tax used to support public transit from 0.1% to 0.2% until Jan. 1, 2028
• An increase to registration surcharges for electric and highly fuel-efficient vehicles, from $35 to $65 annually for cars with a 40+ mpg rating and from $115 to $145 annually for electric vehicles.
• Phasing in a mandatory road usage charge program for electric vehicles by 2031. Electric vehicle drivers have been able to opt into the OReGO program and pay 2 cents per mile in exchange for lower registration fees, and the proposed change would mandate electric vehicle drivers participate in that program or pay a flat $340 annual fee.

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