Without most of the new revenue from House Bill 3991, ODOT is facing a significant funding gap that could lead to reduced services and layoffs. As the Oregon Legislature prepares to convene, ODOT is planning for multiple funding scenarios. State leaders will be considering options to address the funding gap and protect essential transportation services.

The Oregon Legislature passed House Bill 3991 in September 2025 to stabilize transportation funding, cancel planned layoffs, and maintain winter service levels. Petitioners submitted signatures to refer portions of HB 3991 to voters, delaying most of the bill’s new revenue pending a statewide vote.

On Jan. 7, Gov. Tina Kotek called for lawmakers to address ODOT’s funding gap in the upcoming session, repeal House Bill 3991, and pursue long-term transportation funding solutions in 2027.

If legislators provide new funding or other solutions to cover ODOT’s priority services, the agency would be able to maintain current service and staffing levels needed to support public safety, frontline maintenance and direct customer service.

If no additional funding or flexibility is provided, ODOT would need to operate within existing revenue and legal spending restrictions. This would require reductions in services and staffing and would include layoffs. In that scenario, ODOT would prioritize its core mission and service to Oregonians.

Understanding the funding gap

ODOT has a funding gap of approximately $242 million for the current 2025-2027 budget cycle. This reflects the difference between legislatively approved service levels and revenue available under current law.

The Oregon Legislature has identified an additional $55 million needed to help ODOT transition into the next budget cycle. In the upcoming short session, legislators will be looking at a $297 million funding target to support ODOT’s operations beyond June 30, 2027.

The shortfall for this budget cycle is smaller than earlier projections of about $350 million due to:

A $46 million budget reduction approved by the legislature in June 2025.
Higher-than-projected revenue.
Higher-than-expected savings due to voluntary spending reductions and increased vacancy rates.

Without new resources for the current budget cycle, the agency estimates it would need to reduce its workforce by more than 1,000 positions, including eliminating about 570 vacant positions and laying off approximately 470 current employees. Because layoffs would occur later in the budget cycle than originally planned, ODOT would need to reduce about 1.6 positions in spring 2026 to achieve the same budget savings as reducing one position last summer.

What to expect without new resources

Without new revenue or funding, ODOT will be in a position to reduce services that Oregonians rely on. This could include:

Reduced road maintenance and weather response and slower emergency response.
More road safety issues due to deteriorating conditions and slower repairs.
DMV service reductions, longer lines and slower processing times.
Less highway upkeep like litter and graffiti removal and fewer traveler services.

Continuing vital services amid funding discussions

Gov. Kotek is working with legislative leaders to identify a path forward for funding transportation services across Oregon. ODOT is supporting those conversations by providing technical analysis and expertise. Because the size of the funding gap depends in part on legislative decisions, ODOT does not plan to issue layoff letters until after the session is complete and the final funding gap is defined.

“The decisions we make in the coming weeks will determine whether Oregon’s transportation system continues to decline or whether we can restore certainty in needed essential services that Oregonians rely on,” Gov. Kotek said at a Jan. 7 event. “These decisions won’t be easy. There will be tradeoffs and consequences. Hundreds of people will be laid off this spring if we are not successful. Giving up is not an option.”

Source: ODOT

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