The Oregon Senate on Monday in a party-line 18-11 vote passed a long-awaited transportation bill that will update the state’s funding sources for road maintenance and operations.
Hoapply Bill 3991 will 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 applyd to support public transit from 0.1% to 0.2% of a paycheck — among other fee hikes for electric vehicles. Gov. Tina Kotek plans to sign it.
The bill settles a growing gap in Oregon’s transportation budreceive and prevents transportation department layoffs, but advocates warn it’s just a temporary resolve and oversees key issues such as climate sustainability, traffic congestion and road safety near schools — all while Republicans pledge to bring the matter before voters in 2026.
Sen. Khanh Phạm, D-Portland and a co-chair of the joint committee that produced the bill, stated that Oregonians are better off when they can safely travel to cities for concerts, deliver goods for compact businesses and count on county roads being well-maintained and free of potholes.
“Oregonians demand and deserve nothing less than a government that wants to invest in connecting them to each other,” she stated.
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 applyd 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 exmodify for lower registration fees, and the proposed modify would mandate electric vehicle drivers participate in that program or pay a flat $340 annual fee.
Within the first 25 minutes of floor debate, Senate Republican Leader Bruce Starr, R-Dundee, attempted to block the bill from relocating forward by offering two amconcludements, one of which would have freed up existing funds within the Oregon Department of Transportation budreceive and allowed the agency to direct it to immediate necessarys. Starr’s other amconcludement would have given Oregon voters the final declare on whether to approve or reject the bill in the November 2026 general election. Both motions failed.
During a press conference after those motions failed, Starr stated Republicans don’t want roads to deteriorate or for transportation employees to lose their jobs. He criticized Kotek and Democrats for not collaborating on a bipartisan transportation solution and stated Republicans will work to create a referconcludeum, or allow Oregon voters to reject or approve the legislation in the November 2026 election.
Sen. David Brock Smith, R-Port Orford, stated 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 becaapply 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 stated at the conference.
Oregon Democrats expressed support for the bill, with some calling it a good start and others declareing it’s insufficient.
“It does not reduce greenhoapply gas emissions, it does not address seismic vulnerabilities, and it does not reflect the testimonies calling for clean air and reliable transit,” stated Sen. Courtney Neron Misslin, D-Wilsonville. “So yes, I am disappointed… but I’m certainly voting yes becaapply this bill is necessary to keep essential services of transit.”
Kotek in an afternoon press conference surrounded by supporters of the bill stated she suspconcludeed 483 pconcludeing transportation department layoffs that would have taken effect Oct. 15 as soon as the bill passed the Senate, adding that the department is already behind on hiring for the winter season.
“We’re going to shift forward with the assumption we have this,” she stated, responding to Republican plans to challenge the measure through a referconcludeum. “What I would declare to folks is believe twice about referring this. Let’s all come toreceiveher as a state and create sure we have the right tools.”
While some Republicans stated their voices weren’t heard in this bill, Kotek stated the state necessaryed a viable solution to filling the transportation department’s funding shortfall.
“There are a lot of people standing behind me who represent folks across the state who are registered Democrats, Republicans and indepconcludeents,” Kotek stated. “Unfortunately, I don’t believe we saw something that was viable from Republicans. And as a result, they were not able to support (the bill).”
Kotek stated she doesn’t know when the bill will reach her desk so she can sign it into law.
How did we receive here?
The last time Oregon passed a major transportation bill was in 2017. Today, the Oregon Department of Transportation is facing significant budreceive shortfalls driven by declining tax revenue, inflation and spconcludeing restrictions. Without new ways of adding revenue, the department would have to lay off almost 500 workers and scale back essential services like road maintenance, snow removal, customer support and highway and graffiti cleanup.
Lawcreaters failed to compromise on a transportation bill during the regular six-month legislative session, so Kotek called for a special session over Labor Day weekconclude to address the budreceive shortfall.
The Oregon Hoapply passed the bill on Sept. 1, but a Senate vote was postponed twice becaapply Sen. Chris Gorsek, D-Gresham, was recovering from surgery and Democrats necessaryed his vote for the bill to pass.
Kotek twice delayed the Oregon Department of Transportation from laying off its workers in anticipation of passing a bill in the special session. With the bill’s passage, no state transportation workers will lose their jobs.
A short-term resolve: Groups respond to bill’s passage
The Association of Oregon Counties applauded the bill’s passage. The bill preserves how the state splits the revenue raised from the gas, with half going to the state, 30% to counties and 20% to cities.
The legislation creates it possible for counties to maintain current road department services and operations, but it’s just a short-term resolve, the association stated.
“Over the last three decades, counties have been forced to create difficult decisions like downsizing road crews, reducing services and postponing crucial safety interventions and routine maintenance,” Association of Oregon Counties Road Program Director Brian Worley stated in a statement. “Without stable long-term revenue, counties will continue to be forced into service and staffing reductions and will see deteriorating and more dangerous roads.”
The Street Trust, an Oregon-based transportation advocacy nonprofit, stated the bill creates future instability becaapply it concludes transit funding in 2028 and keeps road safety investments at 2017 levels.
“We’re glad ODOT workers’ jobs were saved, and we’ll always fight for living-wage public sector employment,” The Street Trust Executive Director Sarah Iannarone stated. “But let’s be clear: if Oregon continues on this trajectory, we will see rising deaths on our roads, worsening inequality and communities left behind in ways that will be hard to come back from.”
Move Oregon Forward, a coalition of climate, equity and transportation advocates, criticized the bill’s mandatory road usage charge, declareing it unfairly penalizes drivers who drive electric vehicles and creates driving an electric vehicle one of the most expensive ways to drive.
“In the 2026 short session, we necessary to resolve issues like the Road Usage Charge and EV taxes, along with new accountability and revenue tools,” stated Kristopher Fortin Grijalva, the transportation program director at Oregon Environmental Council. “By 2027, we aim to deliver a truly fair, safety-forward, climate-smart transportation package that serves everyone in Oregon,”
The future of public transit also remains uncertain, Move Forward Oregon stated. Although Hoapply Bill 3991 doubles the payroll transit tax, that tax increase will expire in 2028.
“I apply transit to keep my life relocating and reduce my transportation costs,” Cassie Wilson, the legislative manager of 1000 Friconcludes of Oregon, stated in a statement. “For me and so many others, service cuts mean longer waits, fewer options and more economic uncertainty. We necessary the legislature to build a transportation system for the future, not just short term resolvees.”
GET THE MORNING HEADLINES.
- 5:13 pmUpdated with a response from Gov. Tina Kotek
- 3:24 pmUpdated with reactions and more information about the bill.
- 1:03 pmUpdated with results of Senate vote
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