Oregon Transportation Deal Highlights Growing Infrastructure Costs

Lots of American infrastructure is nearing the end of its useful life. Bridges, which generally last about 50 years, need to be replaced; roads are cracked and designed for outdated needs; water systems are breaking down.

Meanwhile, the cost of building and repairing infrastructure continues to rise. Highway construction costs are 68 percent higher now than they were four years ago. The federal government’s role in infrastructure spending is in flux. A massive infrastructure bill passed during the Biden administration wasn’t enough to cover construction and maintenance needs in most states. The Trump administration has begun pulling back grants awarded to some cities. And the main source of revenue for transportation spending in most states, the gas tax, is shrinking as cars become more fuel-efficient and electric vehicles become more common.

That adds up to a long-term problem: Less money for infrastructure at a time when it’s getting more expensive to build and maintain. What are states supposed to do about that?

Oregon, for one, seems unsure. Last month, the state legislature approved a $4.3 billion transportation spending bill, which raises the state gas tax and vehicle registration fees, temporarily raises a payroll tax that supports transit, and pushes more people into the state’s gas-tax alternative, a program called OReGo which charges drivers based on their mileage. The new revenue will go to fund repairs and maintenance on state roads and bridges.

But the final legislation is a far cry from the ambitions of a funding package that state Democrats tried to compile back in the spring.

That bill was intended to make a generational investment in infrastructure, on a scale similar to the state’s last major transportation package from 2017, but with a focus on maintenance more than capital improvements. The bill failed to pass, despite Democratic supermajorities in the state legislature. The Oregon Department of Transportation (ODOT) announced layoffs and likely cuts to basic maintenance. Gov. Tina Kotek, also a Democrat, called a special session in September. The new deal prevents the layoffs, but even the people who voted for it are disappointed.

“It is literally just a Band-Aid, and not a very good one,” says state Rep. Mark Gamba, a Democrat who voted for the bill.

And it may still fall apart anyway. Republicans in the state legislature, led by state Sen. Bruce Starr, the Senate minority leader, are planning to gather signatures to put the law before voters on a state referendum. Starr says Republicans’ primary issue is the tax increases in the bill, coupled with other concerns, like an executive order from Kotek that requires union-negotiated project labor agreements on many state-funded construction projects. Republicans weren’t included in the negotiations during the special session, Starr says.

“They moved a bill without any consideration of Republican ideas or proposals,” Starr says. Putting the bill to a referendum is “the only tool in my toolbox,” he says. “It’s not very elegant but it’s the only tool that they’ve left me with.”

The failure of the deal in the spring reflects “the arrogance of the supermajority,” according to Starr. Democratic leaders initially invited Republicans, including Starr, into negotiations over the package. But Starr felt that Democrats only wanted to know how big a tax increase Republicans would support. Democrats eventually lost not only all Republicans but some of their own members before the deal fell apart.

“All I want and all I’ve ever wanted is to negotiate a compromise,” Starr says.

Democrats say Republicans aren’t being realistic about the scale of the investment needed to keep the transportation system functioning. They also aren’t willing to forgo investments in public transit, bike infrastructure and other car alternatives, as some Republicans have recommended. Members of both parties have also criticized ODOT for inefficient spending, and for over-emphasizing certain highway megaprojects.

Whether the bill goes to a referendum or not, the state legislature is likely to be re-negotiating the transportation funding issue in its next legislative session. It’s a situation that’s increasingly common in state legislatures, where transportation investment has traditionally been a shared bipartisan priority. Gas-tax revenues are making up a smaller share of state transportation spending than in years past, and a fiscal crisis in public transit has compounded the issues. In Pennsylvania, the state budget is currently three months late, with one major sticking point being funding for the state’s public transit agencies. The Illinois legislature failed to make a deal to raise more revenue for transit in Chicago and other cities. (Texas, as a counterpoint, is pumping billions into new roads with revenue from voter-approved referendums.)

In Oregon, the whole transportation network will gradually fall apart if the state doesn’t come up with major new, lasting funding for maintenance, says Gamba, who represents areas around Milwaukie, just south of Portland. But the negotiations in the next session aren’t going to be any easier.

“Americans are going to have to recognize that the [mechanisms] that we have in place for funding the things they count on every day are no longer sufficient for maintaining and growing those systems,” Gamba says. “We’re going to have to pull up our big-boy pants and really decide how we want to address that.”