Oregon transportation tax pause could force layoffs, service cuts

Oregon Rep. Ed Diehl, R-Stayton
Oregon Rep. Ed Diehl, R-Stayton, speaks Friday at an event before No Tax Oregon delivered 193,000 signatures by horse-drawn carriage to the Oregon Secretary of State's Office for a transportation referendum. The No Tax Oregon campaign was led by Diehl, and Sen. Minority Leader Bruce Starr, R-Dundee, pictured right.
Oregon Sen. Bruce Starr's Office

Oregon Republicans collected enough signatures for a referendum seeking to reverse tax increases approved by lawmakers in a special session to prevent mass layoffs at the Oregon Department of Transportation.

Processing Content

The No Tax Oregon campaign led by Republicans Rep. Ed Diehl of Stayton and Senate Minority Leader Bruce Starr of Dundee and Jason Williams of the Taxpayers Association of Oregon turned in 193,000 signatures Friday to Oregon's Secretary of State in Salem. This number is more than double the required 78,116 needed to place the measure on the November 2026 ballot, according to Starr's spokeswoman.

State election officials have until Jan. 29 to determine if enough signatures are valid.

Members of the No Tax Oregon campaign arrived at the Secretary of State offices in a horse-drawn carriage and delivered the signatures in boxes wrapped with Christmas paper.

"We wanted to make a statement that Oregonians aren't going to be ignored," Starr said. "This is a gift from Oregonians to the governor and the Democratic majority to say we're not going to be ignored."

Oregon Gov. Tina Kotek had championed the taxes, saying they were needed to prevent mass layoffs and service cuts to ODOT.

Now that the signatures have been submitted, the taxes will be suspended until after voters weigh in.

"Oregonians have exercised their ability to challenge actions taken by the legislature, and the governor respects the outcome of that process," said Roxy Mayer, Kotek's press secretary.

Kotek, a Democrat, called a special session in August after lawmakers in the Democratic-controlled legislature failed to pass a transportation budget and Oregon Department of Transportation officials said they would have to layoff up to 700 workers and scale back on basic services, like winter freeway plowing.

Within hours after lawmakers approved House Bill 3991 — the transportation bill that brought the GOP-opposed tax increases — on Sept. 29, Kotek directed ODOT to halt planned layoffs, at that point estimated at 483 workers. She delayed signing the bill until Nov. 7, which was seen as an effort to make it more difficult for Republicans to gain signatures for the referendum by the filing deadline.

In her signing statement, Kotek said the bill would "help us keep state highways and local roads safe and open to traffic while preserving transit service and halting the pending layoffs of essential transportation staff."

Under HB 3991, the average Oregon driver would have paid about $66 more annually in registration fees and gas taxes, or about $5.50 more a month, Kotek said in her signing statement.

The increase would have filled a $300 million transportation shortfall for the 2025-27 biennium to maintain current services and prevent the layoffs. 

"The emergency funding that the legislature provided to keep Oregon's roads, bridges, and transit systems safe and working will be suspended immediately," Mayer said. "This means ODOT has a significant budget deficit that must be urgently balanced. Cuts to crucial transportation programs are financially unavoidable, and the governor will need to review a potential layoff process again"

Just last week, Mayer said, there was a rain-caused landslide north of the city of Siletz blocking traffic on Highway 229. 

"ODOT crews are actively responding to the situation," Mayer said. "This is why we need an adequately funded transportation agency to keep Oregonians safe."

Over the past four years, ODOT officials said they had been holding hundreds of positions vacant to manage available resources. Those vacant positions were to be eliminated in addition to the proposed layoffs.

"Republicans must now work with Democrats to find a different solution," Mayer said. "The governor's guiding principle is to avoid, as much as possible, immediate service cuts that will impact Oregonians."

"ODOT staff are reviewing the agency's financial position, including the impact of ongoing cost-saving measures and the high level of existing vacancies, to identify the current funding gap for this biennium," said ODOT spokesman Kevin Glenn. "At the direction of Gov. Kotek, we will continue to hire for critical winter maintenance positions while pausing recruitment for most other roles."

The continued uncertainty is challenging for ODOT, Glenn said, adding that more than 600 positions at the agency are now vacant, which makes it challenging for ODOT to fulfill its mission and serve Oregonians; and many employees are concerned about their jobs.

Update
Adding quotes from ODOT spokesman Kevin Glenn.
December 15, 2025 3:55 PM EST
For reprint and licensing requests for this article, click here.
Transportation industry Oregon State of Oregon Politics and policy State budgets
MORE FROM BOND BUYER