Oregon voters on May 19 overwhelmingly rejected a transportation funding plan passed by the state legislature last fall that was expected to generate $4.3 billion in new revenue over 10 years. The package voters overturned would have increased the state gas tax by six cents per gallon, raised vehicle title and registration fees, and temporarily increased the state payroll tax to support transit funding.
Democratic lawmakers narrowly passed a scaled-down plan last September without any Republican support. Republican leaders later organized a successful signature campaign to place a repeal of the measure on the 2026 primary ballot.
Because the final package represented a compromise, there was no organized support to preserve the transportation funding increases, leading many observers to expect voters would overturn the law. Those expectations strengthened as gas prices rose nationally during the Iran war.
This latest development creates uncertainty about the future of transportation investment in the state which faces a $2 billion shortfall for major projects and core operations. Anticipating passage of the repeal, Gov. Tina Kotek (D) convened a committee to evaluate alternative transportation funding options and develop recommendations for the 2027 legislative session.