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Oregon Governor Kotek Battles for Transportation Bill Amidst Funding Crisis

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  Published in Automotive and Transportation on Wednesday, January 7th 2026 at 15:42 GMT by OPB

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Oregon’s Transportation Bill Faces Rocky Road as Governor Kotek Pushes for Compromise

Oregon Governor Tina Kotek is facing a significant political battle as she attempts to shepherd a comprehensive transportation bill through the state legislature. The bill, aiming to address a looming funding shortfall and modernize Oregon’s infrastructure, is proving to be deeply divisive, pitting urban and rural interests against each other, and drawing criticism from both Republican and some Democratic lawmakers. This article summarizes the key elements of the proposed bill, the roadblocks it faces, and the broader political context surrounding its passage, drawing from reporting by OPB.org and linked sources.

The Problem: A Shrinking Gas Tax and Growing Needs

Oregon’s transportation system is facing a serious financial crisis. The state relies heavily on the gas tax to fund road maintenance, bridge repairs, and public transit. However, with the rise of fuel-efficient vehicles and electric cars, gas tax revenue is steadily declining. Simultaneously, the costs of construction and materials are increasing, and Oregon’s aging infrastructure requires significant investment.

According to OPB’s reporting, the Oregon Department of Transportation (ODOT) estimates a shortfall of nearly $1 billion over the next two years. This impacts not only highway projects but also crucial safety improvements and local road maintenance. Furthermore, the state is grappling with increasing demand for alternative transportation options – biking, walking, and public transit – which require dedicated funding.

The Proposed Bill: A Balancing Act

Governor Kotek’s proposed bill, unveiled in late 2023, attempts to address these challenges through a complex mix of funding sources and policy changes. The bill aims to raise approximately $800 million in new revenue biennially, with a focus on both maintaining existing infrastructure and investing in modernization.

Key components of the bill include:

• Vehicle Miles Traveled (VMT) Fee Pilot Program: This is arguably the most controversial aspect. The bill proposes a pilot program to explore a fee based on the number of miles driven, rather than fuel consumption. The intention is to create a more sustainable revenue source as electric vehicles become more prevalent. The pilot would initially involve a limited number of volunteers, but the long-term goal is a statewide system. Concerns revolve around privacy, equity (potentially impacting lower-income drivers who commute longer distances), and the logistical challenges of implementation. (Details on the pilot program can be found at ODOT’s website: [ https://www.oregon.gov/odot/Pages/VMT.aspx ])
• Increased Registration Fees: The bill proposes increasing vehicle registration fees, with the increase scaled based on vehicle value.
• Corporate Activity Tax adjustments: A portion of the revenue from Oregon's Corporate Activity Tax (CAT) would be redirected to transportation. This is already a source of contention, as some argue these funds should be used for education or other social services.
• Bonding Authority: The bill allows ODOT to leverage bonding authority to accelerate certain projects, effectively borrowing against future revenue.
• Changes to Transportation Governance: Kotek is also pushing for changes to how transportation projects are prioritized and funded, aiming for a more data-driven and equitable approach. This includes prioritizing safety, reducing carbon emissions, and addressing historically underserved communities.

Political Opposition and the Rural-Urban Divide

Despite Kotek’s efforts to build consensus, the bill is facing strong opposition. Republicans are largely united against the proposed tax increases, arguing they will burden Oregonians during a time of economic uncertainty. They also express strong skepticism about the VMT fee, framing it as an invasion of privacy and another example of government overreach.

However, the opposition isn't solely partisan. Some Democratic lawmakers, particularly those representing rural areas, are also raising concerns. A central point of contention is the allocation of funds. Rural lawmakers argue the bill prioritizes urban projects and neglects the unique transportation needs of their constituents, such as maintaining logging roads and supporting agricultural transportation. They want assurances that a significant portion of the new revenue will be directed to rural road maintenance and projects.

This rural-urban divide is a longstanding theme in Oregon politics, and the transportation bill has become a focal point. Republican lawmakers from Eastern Oregon are threatening to use procedural tactics to delay or kill the bill if their concerns are not addressed. They highlight the historical disparity in transportation funding between urban and rural areas and insist on a fairer distribution of resources.

Kotek’s Strategy and the Path Forward

Governor Kotek is attempting to navigate this difficult landscape by emphasizing compromise and collaboration. She has held numerous meetings with lawmakers from both parties and has expressed a willingness to amend the bill to address legitimate concerns. She recognizes the urgency of the situation and is framing the bill as a crucial investment in Oregon’s future.

However, her options are limited. She lacks a clear majority in the legislature and will need to win over moderate Democrats and potentially some Republicans to secure passage. The VMT pilot program, in particular, remains a significant hurdle. Kotek is reportedly considering scaling back the program or delaying its implementation to appease critics.

The coming weeks will be critical as lawmakers debate the bill and attempt to negotiate a compromise. The fate of Oregon’s transportation system, and potentially Kotek's political standing, hangs in the balance. The OPB article suggests a special legislative session may be required if a deal isn’t reached during the regular session, further emphasizing the complexity and importance of this legislation.