OR: Editorial: Lessons from a transportation tax disaster

Even as she called for a repeal of her own transportation funding bill, Gov. Tina Kotek didn’t admit defeat.

She lamented Oregon’s historic failures to finance its infrastructural needs and noted the difficult tradeoffs that will be necessary to fund the state transportation department. She listed the traffic hazards Oregonians face every day and warned of layoffs that will undermine road safety. At the end of her remarks, she urged legislators, community advocates and others to collaborate with her on a new package for 2027.

But nowhere did she take accountability for her role in creating the mess Oregon now faces. While her fellow Democrats dropped the ball first, unveiling a ridiculously large transportation package less than three weeks before the legislative session was to end, Kotek did no one any favors by staying on the sidelines until the session’s dwindling days.

Her efforts to pass a smaller package through a special session were similarly cursed, with quorum issues, legislator health problems and Kotek’s puzzling decision to attend remotely rather than in-person. She also drew too hard a line in negotiating a package, relying on a Democratic supermajority to push through a bill rather than deal in good faith with Republicans whose constituents deserve representation as much as anyone else. Supermajority or not, listening to only one side of the aisle in crafting a massive tax increase is a recipe for severe voter backlash — a lesson she soon learned.

And once the $4.3 billion package finally made it through on the slimmest of margins, the governor delayed signing the bill into law, significantly limiting how long opponents had to collect the signatures needed to refer portions of House Bill 3991 to the November 2026 ballot. It did not matter; arguably, the stalling tactic backfired. A quarter million Oregonians signed the petition in a shockingly short amount of time, setting up a November ballot that includes both the unpopular tax package and Kotek’s bid for a second term as governor. Perhaps most notable about Kotek’s call for a repeal is that such a move would render a referendum moot.

To Kotek’s credit, she does somewhat appear to be taking the opposition’s message to heart. She is looking to move existing dollars in the Oregon Department of Transportation’s budget to prioritize core maintenance spending rather than pass new taxes in the upcoming short legislative session to balance the agency’s budget.

But rather than blindly repeal HB 3991, legislators should proceed cautiously.

It makes sense to repeal the taxes and fees that were referred to the ballot — a 6 cent-per-gallon increase in the gas tax; a 181% increase in title costs; a doubling of the payroll tax and several other hikes — even if Republicans may prefer to keep the referendum on the ballot for political advantage. Certainly, legislators and the governor should have paid much more attention to Oregonians’ voices before passing the bill. Of the thousands of comments submitted on the various transportation packages, upwards of 90% expressed opposition, based on a sampling of testimony. But that shouldn’t stop elected officials from acting on the clear message coming from voters now. The transportation package asks too much of cost-burdened Oregonians, and legislators should answer the public’s call for ditching them.

But aside from those tax and fee increases, some of the bill’s other provisions had broad support, such as a simplified weight-mile tax structure for trucks that addresses constitutional concerns over truckers’ share of the tax burden. Another provision established a road user charge for electric vehicles, expanding on an existing system and helping ensure greater contributions from electric vehicle owners, who don’t pay the gas tax. Legislators should consider the value of these provisions on their own, rather than treat them as bargaining chips for a bigger legislative package.

Additionally, legislators should be prepared to confront the future of such hapless highway projects as the Rose Quarter freeway widening and the Interstate 5 bridge replacement. While both remain central to Oregon’s long-term economic health, mismanagement, ballooning cost estimates, consultant fees and unforced errors have eroded Oregonians’ confidence in the ability of the state to handle such massive commitments. By the end of the session, lawmakers should be able to give the public a substantive update for these mega-projects’ futures.

Lawmakers should protect existing dollars for public transit. But they should also explore how to give local jurisdictions more flexibility over such funding as well as empower them to raise additional revenue themselves for public transit, which will vary in importance from urban areas to rural communities.

And finally, the governor and legislators must lay the groundwork for a truly bipartisan, fairly negotiated, targeted funding package for 2027. While it remains to be seen who will lead that charge next year, the work must begin now. That means evaluating ODOT’s consulting fees, labor contracts, staffing levels and other spending commitments to understand how best to strengthen its financial future. It means putting in place measures and, as soon as possible, a new director, who can instill true accountability as part of the agency culture. It calls for revoking the governor’s executive order that her own transportation department warned would increase costs by up to 20%, while benefiting Democratic donors. It includes asking public transit agencies to comb through their operating costs as well and conduct thorough audits of their spending. And it means rebuilding trust — among executives, legislators and the public to show that every single tax dollar is being spent in the public’s interest.

The transportation package of 2025 showed Oregon policymaking at its worst. The governor and legislators need to show that 2026 will be different.

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