Oregon Gov. Tina Kotek, at the Oregon State Capitol Library in Salem, Oregon, on June 26. (Jordan Gale/Oregon Capital Chronicle)

Kotek said she will have to initiate layoffs next week at the Oregon Department of Transportation after legislative Republicans tanked a bill to provide needed funding

Gov. Tina Kotek blamed Republicans for the state Legislature’s failure to pass a bill this session that would have provided enough funding for the Oregon Department of Transportation to avoid layoffs.

At a news conference Saturday morning, following a late-Friday-night race to end the 2025 legislative session, Kotek touted what she said was progress on most of her key priorities for the state and “unfinished business” in what was supposed to be passage of a historic transportation investment package. She criticized lawmakers from both parties for ending the session two days before they were constitutionally required.

“I’m here,” she said. “Constitutional sine die is tomorrow, and legislators have gone home. And they have not produced anything on transportation that we need right now in the state. So that conversation is very much unfinished business.”

Kotek hinted she could use her power as governor to call lawmakers back to Salem to finish this “unfinished business” in a special session.

“There’s a process for notifying if, for some reason, I’m going to change any of the bills. I don’t know what those will be at this point,” she said. “As governor, my job is to get the job done. And I have tools at my disposal to get that done. And I just hope everyone’s going to show up for work when they need it.”

The wins for now, Kotek said, were securing record investments in K-12 education, maintaining funding for housing and homelessness services and enough money to handle costs for the wildfire season. But she did not mask her frustration with lawmakers’ inability to pass a bill that would have helped close the state transportation agency’s $350 million budget deficit this year. Because of that, she said she would have to issue layoff notices to hundreds of transportation employees next week.

“I have workers, 600 to 700 workers, in the Oregon Department of Transportation, who are now facing layoffs because, for whatever reason, people couldn’t come together as Oregonians to fund that,” she said. “And I would put that at the feet of the folks who could have made that happen — and that is the Republican leadership.”

Last-ditch effort

Republican leaders pointed the finger at Democrats, who they said used a secretive behind-the-scenes process that left Republicans out of critical discussions and resulted in bloated proposals shared too late in the six-month session.

“All session long, people asked us: ‘Well, what do you think of the transportation package?’ And we’d say: ‘We haven’t seen it,’” House Minority Leader Christine Drazan, R-Canby, said at a news conference Friday night. “So part of this issue, too, is getting to this last-ditch tax package that nobody supported happened today. That’s ridiculous.”

Finding a way to fund an agency that relies on gas taxes in a world of growing vehicle electrification, and finding a way to pay for long overdue and long underfunded road, bridge and public transit projects for the next decade, was a key priority for Kotek and Democratic lawmakers in both chambers going into the 2025 session.

But the first version of the initial transportation package, House Bill 2025, wasn’t publicly available until June 9 — less than three weeks from the June 29 constitutional deadline to end the legislative session.

After several weeks of tense negotiations and counterproposals from Republicans and progressive Democrats, that ambitious 10-year, $14.6 billion proposal to fund not only the transportation department, but major bridge, road, bike, pedestrian and public transit projects, turned into a bare bones proposal to raise $2 billion over the next decade just for the state transportation agency. To do this, Democratic lawmakers hastily proposed Friday afternoon to increase the state’s 40-cent gas tax by 3 cents and increase vehicle registration and title fees.

Kotek met with lawmakers individually from late afternoon through the late evening to lobby for votes on the bill. She said she had them, but Democratic leaders in the House and Senate had called for an end to the session before the House could finish voting on bills that were still on the table, and they took an early vote on the $1 billion end-of-session budget bill that would have been the last ground on which Democrats had standing to bargain with Republicans. Agencies, lawmakers and lobbyists often use the bill, called the “Christmas tree bill” to negotiate extra money for projects that didn’t get much attention earlier in the session.

By the time the transportation bill made its way to the floor of the Oregon House Friday night, Republican lawmakers voted not to suspend rules that would have allowed them to fast track its final vote, meaning lawmakers would have had to stay until Saturday or Sunday, which they opted not to do.

Drazan said she was opposed to new taxes that would make it more expensive to live in the state, and that while she doesn’t want anyone to lose their job, she felt the state was overinvesting in public sector jobs at the expense of making it easier for the private sector to grow.

“The answer to get those jobs back, to be able to have more money in our budget, is to grow the private sector and ensure that we have more tax dollars here,” she said. “If we lack economic activity, we’re not going to be able to sustainably support a budget that’s growing anyway.”

Some progress

Kotek gave lawmakers credit for passing budget bills in the midst of chaotic and unpredictable federal actions and funding, and with historically low revenue forecasts due to President Donald Trump’s trade and tariff policies.

“There was less money to work with for lawmakers at the end of the day,” she says. “I can quibble, and we’ll probably have comments going forward about some things that were left undone. In general, significant investments were made on those top priorities.”

Kotek said she was pleased that the Legislature maintained investments in the statewide shelter system for Oregonians without housing and moving people from shelters to stable housing. She also lauded lawmakers for increasing capacity for youth mental health treatment and residential treatment for Oregonians with substance use disorders, sending a record $11.36 billion to Oregon schools, funding summer school and literacy improvement programs for kids, and finding enough money to get through the current fire season and respond to environmental disasters.