LOC News
Special Legislative Session Scheduled for August 29
On July 22, Governor Kotek announced that a special session of the Legislature will begin Friday, August 29. The session is being held to find a short-term solution that provides funding for the Oregon Department of Transportation (ODOT), avoids layoffs, and reopens 12 ODOT maintenance facilities across Oregon.
At the close of the 2025 legislative session, Governor Kotek announced the layoffs of 483 ODOT staff members and the decision not to fill 500 open positions within the agency. This action was taken because a key funding package for transportation was not passed during the session. The governor, along with her staff and state legislators, have been engaged in communication throughout July to identify a framework that could bring legislators back to Salem and find support from 36 House members and 18 Senate members.
The LOC supports Governor Kotek’s call for a special session. The closure of 12 ODOT maintenance facilities leaves communities at risk with the loss of ODOT resources, and without new State Highway Fund (SHF) revenue, cities and counties will continue to face budgetary challenges and deterioration of road conditions.
Transportation Proposal
While exact details of this framework have not been made public, the following elements of the proposal will likely include:
- .06 cent increase in the state gas tax;
- An increase in registration and title fees;
- An increase in payroll tax to provide funding for public transit;
- ODOT accountability and transparency measures from HB 2025; and
- A timeline and process for resolving weight/mile overpayment.
The funding objective for the State Highway Fund is to generate $700 million/biennium, which would apply the revenue formula known as 50-30-20. This formula is the critical revenue-sharing formula for cities and counties.
What Will the Special Session Look Like?
The details of how the special session will play out are not yet available. The Legislature will soon form a Special Session Committee to determine the rules and process. Due to the ongoing construction activities in the Capitol, only one chamber will be available for a floor session. With access limitations, committee hearings will likely be virtual and will take place the week of August 25.
What Can Cities Do?
Outreach by city officials to their state elected officials in the Senate and House will be paramount to our success during the special session. The LOC will have more details on the proposal in the next week, but there are key principles for the LOC to support a transportation funding proposal. These include the following:
- 50-30-20 is the key revenue sharing for cities and counties. For some local governments, their SHF allocation is the only dedicated source of transportation investment available.
- Support for continued funding for public transit that presents value to urban areas and connectivity to rural communities.
- Increased accountability and transparency measures for ODOT.
- Commitment to a bipartisan, transparent, and inclusive process leading to a long-term, comprehensive statewide transportation package in the 2027 session that stabilizes and modernizes core transportation funding for the long-term.
The LOC entered the 2025 session with a transportation package as one of its top priorities for cities. While the funding proposal for this special session is not expected to meet our expectations of a robust, comprehensive transportation package, the proposal can provide short-term funding improvement.
Governor Kotek and legislative leadership have assured the LOC that identifying a long-term transportation package will remain a key legislative focus for the 2027 session. As part of our efforts to advocate for a short-term transportation funding solution, the LOC will also be advocating for the long-term system-wide transportation investment in 2027.
Stay tuned for targeted communications and more details once they emerge next week.
Contact: Jim McCauley, Legislative Director – jmccauley@orcities.org
Last Updated 8/1/25