ODOT facing funding struggles

The agency that keeps our highways operating is facing a structural revenue crisis.

This is due to three main causes, according to the Oregon Department of Transportation (ODOT): Oregonians are driving increasingly fuel-efficient vehicles, and switching to electric vehicles (EV) at a high rate. With increased fuel efficiency and more EVs, Oregon sees lower tax revenues and less money available to maintain the transportation system.

Inflation has made maintaining the transportation system more expensive. Unlike many other states, Oregon's gas tax is static, and isn't tied to inflation. Vehicle and freight hauler fees are also not tied to inflation. With every year that passes, the same dollar purchases fewer materials and less service.

Restrictions on available funding. Only a small share of the funding that comes into ODOT can be used to maintain the state's transportation system and run the agency. State law directs almost half of total state highway fund dollars to cities and counties and then dedicates over half of what's left to pay back bonds for past projects and invest in new projects, leaving only about 20 percent of every dollar available for state highway maintenance.

This structural revenue issue means ODOT faces a $354 million imbalance between the funds that are expected to be available to operate the agency in the 2025-2027 biennium and the cost to maintain current staffing and service levels. Every state agency is required to model what services could be provided based on expected available funding.

ODOT's budget also calls for cutting the size of ODOT's workforce by almost a fifth - from 4,939 to 3,923.

This budget could be catastrophic to ODOT's ability to maintain and operate Oregon's transportation system safely and reliably, the agency warns.

Will the roads get plowed?

ODOT promises that the highways will be plowed this winter. Keeping the roads open is second to overall safety the agency says. It's a matter of degree, however. If crews are reduced by 20 percent, then there are fewer to do the work and that may lead to delays and possible lane closures.

And if the Sisters station were to be eliminated, the work of keeping the pass open would likely fall entirely on the Santiam crews, downhill from the summit.

Photo by Bill Bartlett

Some 2,880 cubic yards of road sand piles 40-feet high at ODOT's Sisters maintenance yard as winter conditions arrive.

While keeping the lanes of commerce open, secondary roads and roads used by recreationists may see a reduction in service. Take Highway 242 (McKenzie Highway): Every effort will be made to keep it plowed at least to Crossroads, but perhaps not to the snow gate, making it difficult for snowmobilers, winter campers at Cold Springs campground, and Nordic skiers and snowshoers having to make it on their own.

With a reduced workforce, crews late getting to Highway 242 - primary access to the elementary and middle schools - could result in school delays.

ODOT says Oregon needs to spend an extra $1.8 billion annually - and more for big-ticket projects promised from the state's last transportation package passed in 2017 - to avoid a wide range of problems that could impact people traveling just about anywhere in Oregon. The potential results include extended road closures, more trash and potholes, and worse winter driving conditions.

In rural areas like Sisters Country, expect increasing response times, Mac Lynde, ODOT's delivery and operations division administrator told a gathering.

"In our rural settings where it may take a few minutes to an hour to show up to a crash, it may take hours in that situation," Lynde said.

Sisters in the crosshairs

Balancing the budget could mean reducing the workforce by nearly 1,000 employee positions across the agency. That level of staffing cuts would involve the consolidation of the agency's maintenance stations, closing 17 of 88. The maintenance stations identified for potential closure are in the communities of Sisters, Estacada, Manning, Detroit, Sweet Home, Veneta, Rose Lodge, Canyonville, Port Orford, Steamboat, Prospect, Maupin, Condon, Mitchell, Adel, Silver Lake, and Chemult.

In 1919, Oregon became the first state in the nation to impose a per-gallon tax on gasoline. Oregon's gas tax for 2024 is 40 cents per gallon, and the federal tax brings the total to 55.17 cents per gallon. The City of Sisters collects another three cents per gallon. Oregon posts the eighth highest state for taxes on gasoline and the 10th most taxed for diesel.

For decades, the gas tax provided adequate funding to maintain Oregon's roads and support new construction projects. Now it's an entirely different picture. Between 2013 and 2017, construction inflation averaged 5 percent higher than consumer inflation. However, between 2021 and 2023, construction inflation rose to 14 percent more than consumer inflation. ODOT projections indicate that this gap will continue to grow in the coming years as the same revenue forecasts continue to decline precipitously.

Oregon has shifted rising transportation costs onto consumers of gas and diesel, with the gas tax going from 10 cents a gallon in 1980 to 40 cents a gallon in 2024. Fuel efficiency for vehicles in 1980 was around 20 miles per gallon jumping to 35 miles per gallon in 2024.

EVs get a free ride

As the federal government and automakers have invested substantially in electric vehicles (EVs), Oregon imposes only a small registration fee for EVs and adds no tax at public charging stations all in an attempt to motivate drivers to switch to EV's.