SALEM, Ore. (Mar. 9, 2026) — The Oregon Department of Transportation will avoid layoffs and major service cuts after state lawmakers approved legislation addressing a $297 million budget shortfall for the agency’s maintenance and operations.
The legislation prevents layoffs and widespread service reductions that officials said could have disrupted daily travel and essential public services across the state. Highway maintenance crews will remain on the job, safety and storm response operations will continue, and Department of Motor Vehicles offices will stay open to serve customers.
Lawmakers redirected $218 million from existing state transportation funds to support operations and maintenance, stabilizing the agency for the remainder of the current budget cycle.
The shift in funding means some transportation programs will see impacts, including delayed or reduced grants for initiatives such as Safe Routes to School and Connect Oregon. Safe Routes to School supports projects that improve safety for students walking and biking to school, while Connect Oregon funds aviation, rail and marine transportation projects.
“This legislative action provides important short-term stability for Oregon’s transportation system,” said Interim Director Lisa Sumption. “It allows us to avoid deep reductions while continuing to focus on providing the services Oregonians rely on. At the same time, redirecting existing funds from programs that serve important functions is not a long-term solution. Oregon’s transportation system needs a long-term fix.”
In addition to the fund transfers, the legislatively adopted budget reduces the agency’s authorized spending levels by nearly $80 million. Officials said the reductions build on cost-control measures the department has implemented in recent years, including leaving positions vacant.
Since 2019, ODOT has reduced spending by more than $500 million, and the current budget already reflects more than $200 million in cuts.
The department currently has about 700 vacant positions statewide, representing nearly 15% of its workforce. More than 350 of those vacancies occurred after employees left the agency during ongoing financial uncertainty that began in July 2025.
Under the new budget, the agency will continue to leave more than 130 positions unfilled. Officials say hiring for critical vacancies will begin immediately to restore staffing in key areas and strengthen frontline teams across Oregon.
Despite the legislative action, transportation officials say the state’s long-term funding challenges remain unresolved. Oregon’s State Highway Fund supports not only ODOT, but also cities and counties throughout the state, and the current funding model has struggled to keep pace with rising costs and growing transportation needs.
Lawmakers have said they plan to revisit transportation funding during the 2027 legislative session.
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