Oregon Department of Transportation and governor prepare for potential impacts as referendum efforts ramp up

By Mia Maldonado, Oregon Capital Chronicle

Petitioners say they’ve gathered well more than enough signatures to block planned increases to the state’s gas tax, vehicle registration and title fees and a transit payroll tax until voters have a chance to weigh in next November. 

No Tax Oregon petition organizers have until Dec. 30 to collect signatures to refer to the ballot a recently passed suite of transportation tax and fee hikes, and they announced last week that they’ve gathered more than 150,000 signatures, nearly double the 78,116 signatures needed. 

The Oregon Secretary of State still must verify the signatures. If they’re valid, then the challenged portions of Oregon’s new transportation funding law wouldn’t take effect until the election, when voters would vote to approve or reject it. 

Petitioners are challenging a transportation funding law Gov. Tina Kotek signed that will raise $4.3 billion over the next decade to fund road maintenance and operations. Democratic lawmakers during a fall special session passed the policy to fill in an estimated $350 million deficit within the agency caused by declining gas tax revenue and rising maintenance and construction costs.

“If the secretary of state ultimately certifies that the petitioners have gathered enough signatures, the emergency funding that the legislature provided to keep Oregon’s roads, bridges and transit systems safe and working will be suspended immediately,” Kotek told the Capital Chronicle. “The proponents of the referral do not have a viable backup plan for making sure Oregonians have basic transportation services.”

The exact effects on Oregon Department of Transportation operations and service levels are not yet clear, and Kotek has directed the agency to continue hiring for vacant winter positions, department spokesperson Katherine Benenati told the Capital Chronicle. 

“If the incoming revenue from (the law) is paused, ODOT would face a significant funding gap, which could lead to cuts to operations and service levels across the transportation system,” Benenati said. “We are working closely with the governor’s office to evaluate next steps and preparing for potential impacts.”

Referendum would challenge four parts of transportation funding law

The petitioners are challenging four components of Oregon’s new transportation funding law, including a 6-cent gas tax increase and a temporary hike in the statewide transit payroll tax from 0.1% to 0.2%, both scheduled to take effect on Jan. 1, as well as planned increases in vehicle registration and title fees scheduled for Dec. 31. 

The increase to the gas tax and to registration and title fees are estimated to generate about $595 million for the department’s 2025-27 budget cycle and $823 million for 2029-31. The temporary payroll tax increase, which expires Jan. 2028, is expected to bring in an additional $197 million during the 2025-27 cycle.

Rep. Ed Diehl, a Scio Republican and one of the three chief petitioners, said the transportation law doesn’t represent the interests of many Oregonians who don’t want more taxes.

“(Oregonians) voiced their opposition repeatedly through the regular session and again during the emergency session, but the governor and the Democrat majority ignored them and rammed this bill through anyway,” Diehl said in a statement. “At some point, the people have to rise up and say ‘no more,’ and that’s exactly what we’re seeing with this movement.”

 No Tax Oregon petitioners and volunteers will continue gathering signatures and expect to gather at least 200,000 signatures — double than their original goal. 

The political committee behind the effort has raised $197,000, and it has spent $129,000 primarily on fundraising software, mailing and printing services, according to campaign finance records as of Monday.

Mia Maldonado covers Oregon and state legislature with a focus on social services for Oregon Capital Chronicle. She started her career in journalism with Oregon Capital Chronicle’s sister outlet in Idaho, the Idaho Capital Sun.