Oregon lawmakers weigh layoffs and redirect funds to close ODOT budget gap

Oregon transportation officials presented lawmakers with two stark choices to close a roughly $242 million shortfall in the Oregon Department of Transportation’s 2025–27 budget: allow hundreds of layoffs or redirect existing program revenue toward maintenance, agency leaders told lawmakers during meetings the week of Feb. 10–11, 2026, according to reporting by the Oregon Capital Chronicle and republications.

The scale of the shortfall varies by scope. Multiple outlets cite a $242 million gap limited to the 2025–27 biennium; the Statesman Journal reports the total rises to $288 million when the beginning of the 2027–29 cycle is included, a figure Statesman Journal says fell from $297 million after $9 million in vacancy savings. The differing totals reflect whether lawmakers and agency leaders are budgeting only for 2025–27 or also accounting for carry-in pressures from the next biennium.

ODOT laid out the agency’s workforce option in stark terms. Early reports said lawmakers could "let the department lay off up to 400 workers" or "almost 500 workers" in some placements; the Oregon Capital Chronicle later corrected its story to note, "This story was corrected to reflect that the worst case scenario for the Oregon Department of Transportation would mean laying off 471 workers, not 400 workers as the story originally stated." That corrected 471 figure represents the agency’s worst-case layoff scenario as reported Feb. 12, 2026.

The alternative presented to lawmakers was redirecting money already in ODOT’s portfolio toward maintenance and preservation. Specific redirection proposals cited across reporting included repealing parts of a 2017 transportation law to free $194 million for bridge and seismic projects, shifting $30 million away from projects including the Rose Quarter, Abernethy Bridge and Boone Bridge in the Portland area, and moving $15 million from the Safe Routes to School grant program into maintenance. Agency leaders also floated shifting $20 million of the privilege tax share away from Connect Oregon and the Oregon Community Paths Fund; redirecting $137 million from the Statewide Transportation Improvement Fund (STIF), which receives revenue via a 0.1% payroll tax for public transit; and moving $20 million from the Transportation Operating Fund, the so-called "lawnmower" fund funded by non-road gas tax receipts.

Political dynamics are central to the gap. Reporters noted that a Republican-led No Tax Oregon campaign has paused revenue the agency had anticipated for the current budget cycle until a statewide vote this November, and that Democratic lawmakers are working to move that vote to May. Lawmakers had passed a bill in the fall intended to fill the department’s shortfall, but the referendum effort stopped those revenues from flowing into the current budget cycle.

Officials also argued the proposed redirections would not cut local highway funding. "None of the options would take away funding counties and cities receive from the state’s highway fund, Sumption said," according to reporting reproduced by Yahoo. Reporting outlets flagged union pressure as well; one headline read "Union presses lawmakers for solution," though the republished excerpts did not identify which union or provide further comment.

Reporters and legislators are seeking ODOT’s presentation slides and a reconciliation memo to clarify whether the department is discussing a $242 million 2025–27 shortfall or a larger $288 million figure that includes early 2027–29 impacts, and to confirm the assumptions behind the 471-layoff worst-case scenario.