SALEM, Ore. — Oregon lawmakers have signed off on a $4.3 billion transportation funding package that will keep state road crews on the job — and raise everyday costs for drivers, businesses, and workers across the Willamette Valley.
The bill, House Bill 3991, passed the Senate late Monday on an 18-11 party-line vote after weeks of stalemate. The approval prevents nearly 500 layoffs at the Oregon Department of Transportation (ODOT) and averts immediate cuts to snow removal, highway cleanup, and basic road repairs that were set to begin this fall.
What Taxpayers Will Notice
The revenue comes directly from Oregonians’ wallets. Beginning Jan. 1, 2026, the state’s gas tax climbs six cents per gallon, from 40 cents to 46. For drivers filling a standard 15-gallon tank, that’s an additional 90 cents each trip to the pump.
Vehicle fees also rise sharply: most passenger registrations will cost $42 more, and vehicle titling jumps by $139. On top of that, Oregon’s payroll tax for public transit doubles from 0.1% to 0.2% of wages through 2028. For someone earning $50,000 a year, that’s about $50 in added tax.
The annual surcharge for electric vehicles will increase by $30, rising from $115 to $145… starting in 2031, must enroll in the state’s OReGo per-mile road usage program.
The Stakes for Salem and the Region
For Salem-area taxpayers, the changes hit on multiple fronts. Commuters who depend on I-5 or Highway 22 will pay more to drive the same miles. Families registering multiple vehicles will feel the fee increases stack quickly. Small businesses with delivery fleets or work trucks face higher operating costs just to stay on the road.
The package is designed to keep ODOT functioning in the near term, but even supporters concede it is not a permanent fix. “Without stable long-term revenue, counties will continue to be forced into service and staffing reductions and will see deteriorating and more dangerous roads,” said Brian Worley, Road Program Director for the Association of Oregon Counties, in a statement acknowledging the bill as a stopgap.
Politics vs. Paychecks
Democrats framed the bill as a matter of safety. “With this legislation, we are averting an immediate transportation safety crisis and doing our part to keep Oregonians safe on the roads,” Senate President Rob Wagner, D-Lake Oswego, said after passage.
Republicans countered that the measure amounts to an unnecessary tax hike. Senate Republican Leader Bruce Starr, R-Dundee, announced plans to pursue a referendum for the November 2026 ballot. If the effort qualifies, the tax and fee increases would be suspended until voters decide. That leaves households and businesses uncertain whether these higher costs are here to stay.
Accountability Promised, But Questions Remain
In response to longstanding criticism of ODOT’s handling of project budgets, the bill includes new accountability provisions requiring more frequent performance audits. Supporters argue this will provide greater transparency. Still, it remains unclear whether that will reassure taxpayers frustrated at paying more for what they see as uneven results.
What’s Next
Governor Tina Kotek is expected to sign the bill quickly, setting the changes into motion. Gas, vehicle, and payroll tax increases start in 2026. The payroll tax sunsets in 2028, but lawmakers could revisit revenue again before then.
For now, the package keeps crews on the road and services intact. But for Salem families and business owners, the daily question will be simpler: how much more will it cost to keep moving?