Layoffs or redirecting funding: Oregon lawmakers grappling again with ODOT’s budget gap

By Mia Maldonado and Robin Linares, Oregon Capital Chronicle

SALEM, Ore. -- Oregon lawmakers are once again discussing ways to fill a massive shortfall within the Oregon Department of Transportation’s budget — except this time, they can’t raise taxes or fees. 

Lawmakers have two options if they want to fill the $242 million gap in the Oregon Department of Transportation’s 2025-27 budget, according to transportation agency leaders. They can let the department lay off up to 400 workers, or they can redirect revenue the department already has from programs and projects toward transportation maintenance.

Even though lawmakers passed a bill in the fall meant to fill the gap the department faced a year ago, the Republican-led No Tax Oregon campaign paused the revenue the agency anticipated for the current budget cycle until a statewide vote in November. Democrats are trying to move that vote to May. 

Without any new revenue sources, the agency has limited options to fill that budget hole. 

The best case scenario is that the agency partners with the Legislature to find a revenue option and doesn’t have to lay off any workers but still leave 138 vacancies open to keep $70 million. 

The second-best case scenario would mean leaving 279 vacancies open and laying off 71 workers to save $140 million.

The worst case scenario would mean leaving 151 vacancies open and laying off 400 workers to save the $242 million. 

There are already 700 vacant positions within the agency, and workers have had to take on the roles of two to three people, Interim Director Lisa Sumption told lawmakers. 

Option two: Redirecting funds from existing ODOT programs toward maintenance

Aside from cutting down the agency’s workforce, ODOT leaders suggested repealing sections of a major 2017 transportation law and redirecting funding designated in that law toward maintenance including $194 million for bridge and seismic projects, $30 million for the Rose Quarter, Abernethy Bridge and Boone Bridge projects in the Portland area and $15 million for the Safe Routes to School program — a grant program that funds road safety projects near schools.

Another suggestion leaders gave was shifting $20 million worth of ODOT’s privilege tax share — a tax paid by automobile dealers when selling new vehicles — away from the Connect Oregon program and the Oregon Community Paths Fund, which provide grants for marine, aviation and rail projects as well as pedestrian paths.  

Agency leaders suggested also redirecting funding from the Statewide Transportation Improvement Fund, which receives revenue through a 0.1% tax on every Oregonian’s paycheck and pays for public transit. This option would provide $137 million in revenue.

Lawmakers could also redirect $20 million from the Transportation Operating Fund, or the “lawnmower” fund, which is funded by non-road gas tax funds.

To see a more in-depth list of what Oregon Department of Transportation agency leaders proposed redirecting, visit the Oregon Legislative Information System website. 

None of the options would take away funding counties and cities receive from the state’s highway fund, Sumption said. 

Union presses lawmakers for solution

Frustrated union leaders urged legislators to provide short and long-term budget relief at a press conference prior to Tuesday’s hearing. 

“The cuts that are being proposed right now would be draconian in some parts of the state, we would see some offices closed. We’d see over 400 people lose their jobs,” said Melissa Unger, executive director of Service Employees International Union Local 503, which represents ODOT employees.

Staff shortages have hit coastal and rural communities the hardest. Mike Atwood, an ODOT employee and union member in the Astoria area said funding uncertainty cut his crew in half over the past year. 

“Now we have a total of eight people trying to take care of 304 shoulder miles,” Atwood said,  which means fewer people clearing falling trees, car wrecks, mudslides and potholes. “It all has to be taken care of, and it’s getting harder and harder with less and less people.”

Transportation budget conversations are far from over, Unger said. 

“We know that this hearing is just one of a conversation this Legislature is going to have, and our message is to figure this out and save jobs and keep our roads safe, so that we have a plan moving forward,” Unger said.