October in eastern Oregon is a busy month to finish harvest, hunt, and generally button up the place for winter. Most of us didn’t have time to notice the Oregon legislature’s $4.3 billion transportation tax hike (HB 3991) passed in late September. But eastern Oregonians will find plenty to be discontented about in this one.
Why was a tax hike needed?
Oregonians are familiar with ODOT’s history of budget woes and cost overruns. This year we were once again threatened by a winter without snowplow drivers unless a major tax increase was approved.
The hype started in July and culminated in the legislature’s late-September showdown.
But once again it was the ol’ bait and switch tactic of threatening basic services to justify a massive bureaucratic spending package.
Annual snowplowing costs in Oregon vary, but a rough estimate is $125 million per year. Oregon’s legislature passed HB 5411 earlier in the year, which funds ODOT at $3 billion per year, leaving ample room to find $125 million for snow plowing. Still, the governor called the legislature into emergency session in late September to consider giving ODOT an additional $4.3 billion over 10 years, or 430 million per year, or she’d have to fire the snowplow drivers. So why does an already funded $125 million snowplowing program need an additional $430 million each year? It doesn’t.
Where will all of that money go?
Once we scratch the surface, we find a network of special projects and nonprofits hungry to be fed by ODOT.
The granddaddy of them all is the Rose Quarter Project, sometimes called the Albina Cap. When Interstate I-5 was proposed over 70 years ago, the state used eminent domain to acquire a swath of properties from Portland to the Washington border. The freeway divided several neighborhoods, including Albina, a primarily black neighborhood. Traffic congestion now requires freeway expansion, which some see as an opportunity to assess reparations for dividing the Albina neighborhood. The project now includes a proposed cap over the freeway, upon which to build a restored version of the Albina neighborhood. Proponents of the cap seem to ignore that gentrification long ago displaced Albina neighborhood descendants. Originally estimated to cost $0.5 billion, recent estimates have quadrupled to $2 billion. Oregon taxpayers have already paid close to $150 million for early planning.
Federal funding for the Albina Cap was pulled back by the Big Beautiful Bill, leaving the project’s budget with a gaping hole. Yet, Oregon’s recent emergency transportation bill continues funding the project at the annual rate of $30 million. If the legislature had recognized that removed federal funds killed the project, Oregon taxpayers would have saved $30 million.
Political maneuvering at the end of the regular 2025 legislative session in June uncovers the tentacles of nonprofit funding embedded in the ODOT budget. Legislators were considering an $11.7 billion tax increase from HB 2025 versus a $2 billion alternative from HB 3402, but the session timed out before either could be passed. As that decision hung in the balance, nonprofits came out of the woodwork to plea for the $11.7 billion version, including:
The Street Trust - led by a Portland mayoral candidate considered too communist for even Portland
PLACE Initiative - advocates for “people-centered mobility”
Unite Oregon - has a mission to “build a unified intercultural movement for justice”
Oregon Trails Coalition - with a vision to “connect Oregonians of all backgrounds and abilities to the outdoors”
The Intertwine Alliance - a coalition of “80 public, private and nonprofit partners supporting parks, trails, greenspace and access to nature”
Rails to Trails Conservancy - a trail advocacy organization based in Oakland, CA
Oregon Conservation Network and Oregon League of Conservation Voters - advocating to “protect pedestrians, cyclists, and drivers—particularly in historically underserved communities”
Notice the emphasis on restorative justice in transportation, which is now defined to include trails and access to nature.
Nonprofit organizations are the mechanism for promoting social change. Despite being funded by taxpayer money, they are exempt from public records, open meeting, and financial accountability standards of a state agency. State agencies and political interests can pursue agendas that the public might question through public funding of these nonprofits.
The nonprofit system is sustained by ODOT’s Office of Equity and Civil Rights which supports approximately 20 state employees at $12.5 million each year to pursue goals like restorative justice in transportation.
For eastern Oregonians who simply want their highways plowed in the winter and patched in the summer, the transportation bill is a bitter pill to swallow, particularly since rural drivers will bear the brunt of the new taxes that will fund more social engineering.
Which Taxes Does the Transportation Bill Increase?
The bill remains true to ODOT’s recent history of penalizing rural areas and businesses, which drive longer distances and rely on gas and diesel, while rewarding urban areas in moderate climates, suited for electric vehicles. Oregon ranks 48th out of the 50 states for business friendliness. This bill seems determined to drive the state’s business environment even lower.
The bill raises fuel taxes to $0.46 per gallon at a time when crude oil prices are decreasing. Oregonians simply won’t realize the cost breaks that other states are getting. It’s a clever way to raise taxes under the radar. Idaho’s state gas tax will remain steady at $0.33 per gallon, allowing them to fully enjoy decreasing gas and diesel prices.
Agriculture industry and other business owners will pay more for fuel than competitors in neighboring states. Rural Oregonians drive an average of 16,120 miles per year (from the 2017 Oregon Department of Transportation OHAS Report), resulting in an existing state gas tax of $430 per year, which this bill increases by $65.
The bill also essentially doubles vehicle titling and registrations fees. That has a small effect on the urban or suburban car owner. For rural farmers or ranchers or business owners that require a fleet of trucks to haul products, crops, livestock, equipment, or feed, doubling of registration fees will be painful.
The bill also doubles the payroll tax, which falls completely on the shoulders of private business. State or nonprofit employees will simply notice adjusted numbers on their pay stubs. Taxing state employees is a handy way for the state to launder money back to itself.
Will the state do anything to control ODOT costs?
While the transportation bill acknowledges the need to control costs, it adopts no accountability measures and follows the normal bureaucratic approach - appoint committees and reorganize existing programs. You can learn more about that here, but it doesn’t look promising for cost cutting.
How will eastern Oregon Highways Fare this Winter?
The snowplowing budget was assured back in June, but with the legislature’s $4.3 billion tax hike, at least ODOT will be less motivated to threaten us with reduced services for the next 10 years. Eastern Oregonians will get their highways plowed and sanded this winter. And, portions of the tax hike will trickle down to counties and cities for maintenance of local roads. But the cost of these basic services is to carry a disproportionate share of more social engineering. And that’s cause for a winter of discontent.
Status Update: While Governor Kotek had not yet signed the transportation bill as of the date of this posting, her signature appears inevitable. Interest by citizens to overturn the bill by placing a measure on the ballot is growing. Until the governor signs the bill, signature collection may not begin, and she is apparently running down their 90-day clock by delaying her signing. To stay up-to-date on the ballot initiative, visit the Oregon Watchdog website.