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Oregon Governor Calls for Repeal of 2023 Transportation Package

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  Published in Automotive and Transportation on Wednesday, January 7th 2026 at 13:59 GMT by Oregonian

Oregon Governor Tina Kotek Calls for Repeal of 2023 Transportation Package, Citing Implementation Issues and Lack of Progress

Oregon Governor Tina Kotek has made a stunning reversal, calling for the full repeal of the 2023 transportation package, SBIM 10, which she herself championed just over a year ago. The package, designed to fund transportation projects across the state, has been plagued by implementation challenges, escalating costs, and a perceived lack of tangible results, leading Kotek to conclude that a fresh start is necessary. This decision, announced on January 26, 2026, marks a significant political shift and raises questions about the future of transportation funding in Oregon.

SBIM 10, passed with bipartisan support, authorized approximately $2.2 billion in bonds for a range of projects, including highway improvements, bridge repairs, and investments in electric vehicle infrastructure. The core of the funding came from a new vehicle registration fee and a corporate activity tax. Kotek initially framed the package as a vital step towards modernizing Oregon’s infrastructure, addressing congestion, and promoting economic growth. However, as OregonLive reports, the reality has fallen far short of expectations.

The problems began almost immediately. The Oregon Department of Transportation (ODOT) struggled to finalize project lists and timelines, hampered by bureaucratic delays and a shortage of qualified contractors. This led to cost overruns on several key projects, eroding public trust and fueling criticism from both Republicans and Democrats.

One particularly contentious issue, detailed in a follow-up article linked within the OregonLive piece, concerns the I-5 Rose Quarter Improvement Project in Portland. Originally envisioned as a solution to notorious traffic bottlenecks, the project faced relentless opposition from community groups concerned about its impact on historically Black neighborhoods. While modifications were made to address these concerns, the project still experienced significant delays and budget increases, becoming a symbol of the broader problems with SBIM 10. The Rose Quarter project's escalating costs – now estimated to be significantly higher than initial projections – contributed heavily to Kotek’s decision.

Another factor cited by Kotek is the impact of high interest rates. The package relied heavily on bond financing, and as interest rates rose sharply in 2024 and 2025, the cost of servicing the debt increased dramatically, further squeezing the available funding for actual construction. This meant fewer projects could be completed for the same amount of money, diminishing the package’s overall value.

Kotek’s announcement isn’t simply a call for abandonment. She proposes a "reset" of transportation funding, advocating for a new package to be developed in the 2027 legislative session. She envisions a more streamlined process, focused on prioritizing projects with clear benefits and realistic cost estimates. She's also suggesting a different funding mechanism, potentially exploring options beyond the bond-heavy approach of SBIM 10. While details are still scarce, Kotek expressed a desire to consider fuel taxes, usage fees, and potentially even a revised corporate activity tax, contingent on addressing concerns about its implementation.

The reaction to Kotek's announcement has been predictably polarized. Republican lawmakers, who had consistently opposed SBIM 10 from the outset, are largely applauding the move, though some are framing it as an admission of failure on the Governor's part. Senator Bill Post, a vocal critic of the package, called it “a monumental blunder” and demanded a full accounting of how the initial funds were spent.

Democratic legislators, while largely supportive of Kotek’s overall goals of improving transportation, are expressing caution. Some worry that repealing the package will leave critical infrastructure projects unfunded and could jeopardize the state’s long-term economic competitiveness. Representative Julie Fahey, chair of the House Transportation Committee, emphasized the need for a swift and responsible transition plan to avoid disrupting ongoing projects. She stated the committee will be heavily involved in crafting the new proposal.

The repeal, if approved by the legislature, will require a complex process of unwinding existing contracts and reallocating funds. ODOT is currently working on an assessment of the outstanding obligations and a plan for transitioning to a new funding model. Kotek acknowledged that the repeal will likely trigger legal challenges from contractors and bondholders, but expressed confidence that the state can navigate these hurdles.

This situation highlights the significant challenges of implementing large-scale infrastructure projects in Oregon, particularly in the face of shifting economic conditions and complex political dynamics. Kotek's decision, while politically risky, reflects a pragmatic assessment of the current situation and a willingness to admit when a policy isn’t working as intended. The upcoming legislative session will be crucial in determining the future of transportation funding in Oregon and whether a new, more effective approach can be forged. The success of the next attempt will hinge on building broader consensus, realistic budgeting, and a more efficient implementation process.