LOC News
HB 2025 Transportation Package in Jeopardy – OUTREACH NEEDED ASAP!
With about a week left in the legislative session, the transportation funding package is now in danger of not moving forward. Recent articles and conversations with some legislators suggest that what began as an effort to create a bipartisan package has not materialized. There is concern about the scale of the package and the layers of new and additional taxes and fees.
For cities, what’s important to understand is that this package is different from every transportation package in the last 20-plus years. Previous transportation packages have focused new revenue on projects instead of operations and maintenance. HB 2025 flipped the focus by dedicating 70-80% of the new revenue to the State Highway Fund (SHF), which is why local governments will benefit significantly from this legislation.
Preliminary estimates from the state’s Legislative Revenue Office indicate that by 2030, the annual distribution to cities is expected to be $473 million. By comparison, this current fiscal year distribution is $238 million. In other words, your local SHF distribution will nearly double from your current level. To view your city's estimated distribution, click here.
Don’t Delay, Reach Out Today. Every legislator needs additional outreach from cities ASAP! LOC members need to ensure their legislators understand the importance of this transportation package and the value it brings to communities across the state. Since each city has a projected SHF distribution, it’s essential to inform legislators about your plans for utilizing additional funding.
The LOC has testified in support of HB 2025, as the legislation meets the core elements required in a transportation package. In addition, HB 2025 will invest at least $250 million in the Great Streets program, $50 million in Safe Routes to School, and an additional $250 million for anchor projects, which are essentially some of the remaining HB 2017 projects.
A significant investment is also being made in public transit. Currently, the payroll tax of 0.1% generates about $137 million. HB 2025 has new payroll tax levels set for 2026 at 0.18% and for 2030 at 0.30%. These new revenue levels will enable the expansion of existing services, including increased connections to rural and frontier communities. Early estimates suggest that by 2026, the payroll tax will generate an additional $100 million, and by 2030, public transit will have access to an additional $250 million when compared to today’s $137 million.
Contact: Jim McCauley, Legislative Director – jmccauley@orcities.org
Last Updated 6/20/25