SAN FRANCISCO - Oregon Gov. Ted Kulongoski this week proposed billions of dollars in transportation spending to stimulate the economy and rebuild the state's transportation infrastructure.

The Jobs and Transportation Act of 2009 would raise $499 million a year in new revenue indefinitely for road projects, including $50 million that would be leveraged to raise $600 million to begin "freight bottleneck relief."

The act would dedicate $60.1 million of existing revenue and raise $5 million in new revenue to fund multimodal transportation projects. Kulongoski would use $16.1 million of the money to back $185 million of bonds that would replace an existing Amtrak train and fund grants for local multimodal transit projects.

"Building roads, bridges, and public transit is good for the economy and puts our citizens back to work," Kulongoski, a Democrat, said at a joint session of the state House and Senate transportation committees. Oregon lawmakers are not currently in session, but the committee held a special meeting to hear an outline of the governor's proposal.

The proposal comes as the state, like most others, is struggling with sharply slowing revenue growth. The state economist will update revenue forecasts later this month, which could force lawmakers to make cuts to a $12.9 billion biennial budget.

A September revision shaved $119 million off revenue projections, leaving an expected surplus of just $23.8 million for the 2007-2009 budget cycle. At the least, lawmakers expect to hear that they'll face tough decisions when they craft a budget for the upcoming 2009-2011 biennium.

But tough budget times shouldn't prevent the state from responding to its long-term transportation needs or stimulating the economy while it is weak, Kulongoski told lawmakers.

Democrats have big majorities in both houses of the Legislature, and some lawmakers, including Senate President Peter Courtney, D-Salem, have been pushing for an infrastructure program.

"We are facing what may be the most serious economic crisis since the Great Depression," Kulongoski said. "We need to focus on creating jobs."

To fund his $499 million a year road plan, the governor would dramatically increase vehicle registration and title fees, while increasing gasoline taxes by 2 cents to 26 cents a gallon. The vehicle registration fee would triple to $81 a year from $27 a year under the governor's proposal.

To fund the smaller multimodal program, he would increase the state cigarette tax by half a cent to 2.5 cents a pack to raise $5 million a year for disabled and elderly transport.

He would dedicate $16.1 million of state lottery proceeds to pay back the multimodal transit bonds, and he would reallocate $44 million a year of "flexible" federal Surface Transportation Program funding for multimodal projects instead of highways.

Kulongoski said he's open to changes in the precise funding mechanisms.

His staff is currently drafting the detailed legislation, which will be introduced as soon as the Legislature returns in mid-January, said Chris Warner, the governor's chief transportation adviser.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.