PORTLAND, Ore. (KOIN) – After calling state lawmakers back to the Capitol for a special legislative session, Oregon Governor Tina Kotek unveiled a funding proposal on Thursday to address the state’s transportation crisis.

Governor Kotek called for the special session in July following the death of HB 3402 on the House floor,

which aimed to bridge a $350 million funding shortfall under the Oregon Department of Transportation. That shortfall threatens the largest mass government layoff in state history and service disruptions without adequate funding, officials warn.

On Thursday, the governor’s office said the proposal will save critical transportation and maintenance services, protect jobs for hundreds of essential workers across the state and will preserve transit services.

“In the weeks since the adjournment of the legislative session, my team and I have worked every day with legislators, local partners, and key stakeholders to zero-in on a focused solution for the immediate crisis in our transportation system,” Governor Kotek said in a statement Thursday. “I am confident that lawmakers will step up this month to avert these layoffs and I appreciate their partnership in getting to the other side of this crisis.”

The governor said the proposal would offer adequate funding for the State Highway Trust Fund in the 2025-27 biennium, while maintaining emergency funds for things such as wildfire suppression.

Under the proposal, half of the revenue from the gas tax, registration and title fees will go towards ODOT to avoid layoffs, service reductions and maintenance station closures. This includes a six-dent gas tax hike, along with a $42 increase for registration fees.

The proposal also includes accountability measures for ODOT. This includes a performance audit from the Secretary of State’s Office, and a repurposed Continuous Improvement Advisory Committee to oversee on-time and on-budget delivery for ODOT. The advisory committee would also report to the legislature’s Joint Committee on Transportation.

“The Governor’s proposal is a targeted, near-term, and necessary fix to a statewide crisis. We must protect the jobs of ODOT employees whom we rely on to keep our roads and bridges safe,” Senate President Rob Wagner (D-Lake Oswego) said. “For decades, Oregon has underinvested in the safety and maintenance of our roads, bridges, and transit options. This proposal doesn’t solve all the funding challenges facing our statewide transportation system, but we have an opportunity with this legislation to keep Oregon on a path toward a fair and stable funding system that puts safety first.”

“This proposal is about keeping Oregonians safe; making sure that every community – urban and rural – has functioning roads and transit; and holding ODOT accountable to Oregon taxpayers,” House Speaker Julie Fahey (D-Eugene) added. “We’ve heard from mayors, county commissioners, and transit leaders across the state who have been clear that the stakes are real and the timeline is urgent. We need to take action before harmful cuts to transportation services take effect.”

However, Oregon Republicans called Kotek’s package “tone-deaf.”

“The governor’s tax package is going to hurt struggling families. Oregonians will be paying more but getting less—no new lanes, no improved bridges, just higher taxes. House Republicans proposed using money from the state’s Legislative Emergency Board to protect maintenance and preserve essential jobs that keep our roads safe, but the governor rejected any plan that didn’t raise taxes,” said House Republican Leader Christine Drazan (R-Canby). “Her plan to cut maintenance workers was dangerous and wrong, and her push to raise costs at the pump is extreme and out of touch. She should listen to Oregonians, work across the aisle and pursue a measured approach to the transportation needs of the state without forcing the largest transportation tax increase in Oregon’s history.”

The governor warned if revenues for the State Highway Fund are not secured in the special session, a first wave of layoffs at the Oregon Department of Transportation will take effect September 15 with a second wave slated for January 2026. In late July, ODOT laid off over 480 employees out of an estimated 600-700 total layoffs.

After Kotek called for the special session, the governor directed ODOT to postpone the first wave of layoffs until Sept. 15 to allow lawmakers time to develop a funding proposal and allow impacted ODOT workers time to come up with contingency plans.