SALEM, Ore. (Jan. 7, 2026) — Gov. Tina Kotek on Tuesday outlined urgent steps to stabilize Oregon’s transportation system, warning that difficult decisions in the coming weeks will determine whether essential services continue to deteriorate or begin to recover.
Speaking at the Oregon Transportation Forum’s annual meeting, Kotek urged lawmakers to take immediate action to shore up core operations at the Oregon Department of Transportation (ODOT) while beginning discussions on longer-term funding solutions. She framed the approach as “redirect, repeal, and rebuild.”
“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,” Kotek said. “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.”
Kotek called on lawmakers to redirect existing transportation dollars toward operations and maintenance during the February legislative session, saying emergency action is needed to prevent planned spring layoffs and preserve basic services. She said nearly all transportation programs must be considered for reallocation because the state’s overall budget deficit prevents the use of general fund dollars to address a projected $242 million gap at ODOT.
The governor also asked lawmakers to repeal House Bill 3991, a transportation funding package passed during a 2025 special session. The law’s revenue provisions are currently frozen after opponents successfully gathered enough signatures to refer them to the Nov. 3, 2026, general election ballot. The Oregon Secretary of State’s office verified that 163,451 valid signatures were submitted — more than double the roughly 78,000 required — qualifying a referendum that will put planned increases to the gas tax, payroll tax and vehicle registration and title fees before voters next year.
As a result of the petition’s success, the tax and fee increases approved earlier this year will not take effect unless voters approve them at the ballot. The pause raises questions about ODOT’s budget, and the agency has warned that without new revenue, critical maintenance projects could be delayed and layoffs may be necessary.
Supporters of the referendum, organized under the name No Tax Oregon, said they collected well over the minimum required signatures, with some estimates approaching 200,000. They argue that the cost increases — including a six-cent per gallon gas tax hike and higher registration and title fees — would worsen affordability challenges and that voters should have the final say.
In addition, Kotek pledged to lead a bipartisan effort to develop a comprehensive transportation funding and investment package for the 2027 legislative session, bringing together stakeholders, elected officials and technical experts to align transportation spending with economic development, workforce needs and long-term safety goals.
Republicans sharply criticized Kotek’s remarks, arguing her request to repeal HB 3991 amounts to an admission that the package was flawed and rushed.
“Governor Kotek is not repealing this bill because she suddenly discovered it was bad policy,” said Senate Republican Leader Bruce Starr of Dundee. “She is doing it because Oregonians stood up, made their voices heard, and forced her to make a political decision to save face.”
Rep. Ed Diehl of Stayton, one of the chief petitioners, said repealing the bill undermines voters who sought to weigh in on the tax package. “Hundreds of thousands of Oregonians signed petitions because they opposed this tax hike and wanted a vote,” Diehl said. “Repealing the entire bill instead of only the provisions referred to voters is about political leverage.”
House Republican Leader Lucetta Elmer of McMinnville said a full repeal would go beyond what voters targeted and would erase provisions Republicans say were bipartisan improvements.
“You can talk about bipartisanship all you want, but actions matter,” Diehl added. “Simply having a Republican in the room doesn’t make a bill bipartisan if it has no impact on the final outcome.”
Republican lawmakers said they plan to participate in upcoming discussions while maintaining their long-held position that existing revenues should be better prioritized before taxpayers are asked to pay more.
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