Oregon’s transportation system is facing a severe financial crisis after decades of underfunding and legislative missteps, offering a cautionary tale for the nation’s broader infrastructure challenges. The Oregon Department of Transportation (ODOT) carries hundreds of millions in debt and must make difficult decisions to maintain essential services like road maintenance, snow removal, and landslide mitigation, while public transit agencies are also facing budget shortfalls and service cuts.
The crisis has deep roots, including the state’s 2017 transportation legislation, which raised gas taxes and motor-vehicle fees but failed to provide sufficient funding for the extensive highway projects it mandated. Additional factors, such as improved fuel efficiency and lower-than-expected driving, reduced projected gas tax revenues. Plans to generate revenue through congestion pricing in Portland were abandoned, further limiting funds. Efforts in 2025 to pass a comprehensive transportation bill stalled, forcing lawmakers to adopt a temporary stopgap measure, which is now subject to a voter referendum, adding uncertainty to ODOT’s planning and operations.
Oregon now faces difficult choices regarding its large-scale highway projects. The Interstate Bridge Replacement Project, initially estimated at $6 billion, has seen costs more than double, casting doubt on its feasibility. Similarly, the Rose Quarter I-5 project has ballooned from $450 million to approximately $2 billion, especially after the rescinding of federal Reconnecting Communities Program funds. ODOT is under pressure to balance highway expansion with community-focused components, but funding gaps make achieving this balance uncertain.
To address a $242 million deficit, the governor has proposed redirecting funds from previous legislation toward basic road maintenance, though the specifics of which programs or projects will be cut remain unclear. Advocacy groups and local governments are mobilizing to protect programs like Safe Routes to School, highlighting the tension between maintaining essential services and funding ambitious megaprojects. Leadership changes at ODOT also present an opportunity to prioritize transparency, multimodal transportation, and community needs.
Oregon’s situation offers broader lessons for the nation. The federal Highway Trust Fund faces similar fiscal challenges, with stagnant gas taxes and reliance on general fund transfers to stay solvent. Like Oregon, federal programs have promised more projects than available resources allow, leading to gaps between expectations and results. Reorienting transportation programs around accountability, efficiency, and outcomes—rather than simply funding large projects—could help rebuild public trust and ensure that limited resources are used effectively.
Ultimately, Oregon’s transportation funding crisis underscores the importance of focusing on basic maintenance, safety, and multimodal connectivity, rather than overcommitting to costly megaprojects. By prioritizing outcomes and fiscal sustainability, the state—and the nation—can restore confidence in transportation systems and ensure that infrastructure investments deliver tangible benefits to communities.
