Spending Solutions for ODOT’s Spending Problems

By Naomi Inman

The Oregon Legislature’s Joint Committee on Transportation Funding considered legislation over the Labor Day weekend called “LC 2” as they held a special session to address transportation funding.

The Governor’s Transportation Budget Framework defines the problem as an ODOT “budget gap” that needs to be addressed with a “funding solution.”  She says that the cause is a lack of revenue for ODOT, often repeated by legislators, lobbyists, and journalists who describe the problem as “declining revenue,” or a “dwindling gas tax.” These statements are simply not supported by ODOT’s financials showing that net revenue grew by 30 percent since 2018 and reached record highs in 2024.

A spending problem, not a funding problem, is the reason ODOT is about to eliminate 900 positions. The real problem is two-pronged: first, too many statutory restrictions on existing revenue; and too much debt service on $4 billion in highway bonds, which have grown at a much faster rate than ODOT’s revenue.

In reviewing LC 2, Cascade offered the Committee two suggestions. First, amend LC 2 to free up gas tax funds for services Oregonians need and have already paid for. Next, pay off these highway bonds with lottery revenues. This would increase ODOT’s available gas tax revenue by more than 50 percent without a tax increase.

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Naomi Inman is External Affairs Manager of Cascade Policy Institute, Oregon’s free market public policy research organization.

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