Recent federal, state and local transportation budget cuts may hit North Portland residents especially hard.
Gov. Tina Kotek has called a special session of the Oregon Legislature on Aug. 29 to approve a version of the transportation funding package that did not pass in the 2025 session, contributing to the funding crisis. Among other things, Kotek is proposing that lawmakers raise the state’s 40 cents per gallon gas tax by 6 cents, increase car registration fees by $42, hike title fees by $139, implement a new $30 fee for electric vehicle users, and double the state’s 0.1% payroll tax for transit. Whether it receives three-fifths votes in both chambers needed for tax increases remains to be seen.
State Sen. Lew Frederick (D-N/NE Portland) said the Legislature needs to take action, even though the full extent of the transportation cuts at all levels of government is not yet fully known.
“This is a very serious situation,” Frederick said during a recent meeting with constituents, noting that approximately 500 Oregon Department of Transportation employees were scheduled to be laid off. On July 22 Kotek postponed the layoffs for 45 days when she called the special session.
Photo from the Capital Chronicle.
Local officials are trying to determine the impacts of the cuts due to President Trump’s One Big Beautiful Bill and some of his executive orders, along with Portland Bureau of Transportation cuts the City Council approved July 1. The council directed city officials to develop a comprehensive alternative local transportation funding strategy and called for the Legislature to pass a new transportation funding package.
“The state needs to get its act together,” city Councilor Sameer Kanal (District 2) said before the unanimous July 16 vote.
House Bill 2025 would have raised approximately $14.6 billion for ODOT, local governments and public transit agencies. It failed because of concerns over whether Oregonians could afford its vehicle-related tax and fee increases. All but one Republican and some Democrats opposed the package in the closing days of the regular 2025 session.
In response to Kotek’s announcement, House Minority Leader Christine Drazan (R-Canby) said her members still oppose increasing transportation taxes and fees. This means all Democrats must support Kotek’s proposals for it to pass.
North Portland transportation cuts coming
By press time, these potential North Portland transportation-related impacts have already been reported:
• Continued I-5 congestion. Federal funding for two major projects intended to reduce congestion on Interstate 5 through North Portland—the Interstate Bridge Replacement program and the I-5 Rose Quarter Improvement Project—has been rescinded, and both projects have been thrown into question. It is now unclear whether the federal government will fully fund its share of the planned replacement bridge. Trump’s tax and spending bill reportedly rescinded approximately $400 million in federal funding for work on I-5 through the Rose Quarter. Though both projects are controversial, there are no backup plans to reduce congestion on I-5 through North Portland.
• More homeless camps and trash along I-5. In addition to the layoff of 500 employees, ODOT said it will no longer pay Portland to remove homeless camps and trash on its property in the city. ODOT had been paying the city $4 million per year to conduct such sweeps. (A state-funded $900,000 project to erect permanent fences along Interstate 405 in Southwest Portland will continue, however.)
• Traffic safety improvement projects at risk. Portland Mayor Keith Wilson said 126 active federal grants totaling $387 million, many of which are funding transportation and housing projects, are at risk because of the city’s diversity, equity and inclusion policies. One federally funded project in North Portland, the $38 million Broadway Main Street and Supporting Connections project intended to transform North Broadway into a family-friendly civic main street, has officially been canceled.
• Disruption of projects along North Lombard Street: Projects along this major thoroughfare, which is a federal highway, could be affected. PBOT lost $11 million in expected ODOT funds when HB 2025 collapsed. Approximately 50 PBOT employees have been laid off, and the agency is working to determine which projects in what parts of town will be delayed or canceled. Future traffic safety projects in North Portland could be hurt if the state gas tax is not increased, because 20% of the revenue goes to cities for such work.
• Future transit service cuts. North Portland is one of the most transit-dependent communities in the state. TriMet said because the statewide transit payroll tax in HB 2025 did not pass, it must begin reducing service this winter, with a series of further cuts over the next few years, resulting in at least a 10% overall reduction by the end of August 2027. Without additional revenue, TriMet will also be forced to cut another $48 million in service and other spending.
These blows are on top of ongoing PBOT funding problems the City Council acknowledges will take years to solve. According to the July 16 Council resolution, Portland’s transportation system has long been failing because traditional funding sources, including declining gas tax revenues and parking fees. As a result, pavement conditions across the city are deteriorating, with 56% of busy streets and 64% of local streets currently rated in poor or worse condition, the resolution said.
The resolution calls for a robust and inclusive public involvement process that includes residents, neighborhood associations, community-based organizations and business interests to develop a strategy. No public forums have been announced. A report with recommendations will be presented to the council by Dec. 1.