Kotek pushes gas tax, transit fix in Oregon special session

Published 3:31 pm Wednesday, July 23, 2025

When Oregon lawmakers return to Salem next month for a special session, they will be asked to raise taxes to help stave off hundreds of layoffs and restore critical road maintenance and transit programs currently on the chopping block.

Despite the Legislature being unable to pass a transportation package last month, leaving the Oregon Department of Transportation facing a $350 million shortfall, Oregon Gov. Tina Kotek told reporters at a press conference Wednesday she believes the special session will succeed.

While legislation is still being finalized for the August special session, Kotek said it will likely include a six-cent increase in Oregon’s gas tax and higher vehicle registration fees. In addition, she said, drivers of electric vehicles, which don’t pay the gas tax, would instead pay an additional fee and enroll in the state’s OReGo program, which charges drivers a small fee for miles driven. Kotek is also looking to double the 0.1% payroll tax taken from Oregonians’ paychecks to support public transit.

Together, Kotek said, these increases would be enough to prevent hundreds of layoffs already in motion at ODOT, preserve essential services like snow plowing, brush clearing, and highway maintenance, and throw a lifeline to cities and local transit agencies that rely on state transportation dollars.

“That’s not everything they need,” she said, “but it will get them through.”

Kotek has spent weeks in daily conversations with lawmakers and stakeholders to hammer out a targeted plan, she said, and does not expect conservatives in the Legislature to derail the effort. Republicans had toyed with a walkout in the final days of the session last month.

“I am confident that next month legislators are going to show up, and they’re going to approve the necessary funding for the state’s transportation needs,” Kotek said.

In addition to the funding fix, Kotek wants the Legislature to address a handful of transportation-related issues, including increased audits at ODOT, giving the governor power to hire and fire the department’s director, and repealing a 2017 mandate that called for tolling on some state highways — which proved unpopular with the public and lawmakers alike.

Despite signs of progress, political tensions remain. House Minority Leader Christine Drazan criticized the proposal’s reliance on new taxes, arguing the funding shortfall could be solved by reallocating existing state dollars.

“This could have been prevented if Democrats had come to the table and considered House Republicans’ alternative plan to fund ODOT by refocusing existing revenue instead of adding billions of dollars in new taxes on struggling Oregonians,” Drazan said in a statement on Tuesday.

The state has typically relied on gas taxes and fees to pay for transportation, and Kotek said that with federal budget cuts looming and a state budget forecast expected to come in lower than first predicted, now is not the time to change how transportation agencies get their funding.

The special session is scheduled for Aug. 29.