For years, Portland transportation leaders have sounded the alarm about the funding crisis threatening the city’s streets, sidewalks, and bike paths. The Portland Bureau of Transportation (PBOT) relies on increasingly unsustainable funding streams, and previous efforts to change course have largely failed. 

Now, with state and federal funding in flux, the city’s transportation funding problem is more dire than ever—and Portland City Council members say they want to take action. This week, councilors adopted a resolution directing city staff to develop a plan for alternative transportation and infrastructure funding. Councilors asked the Public Works and Budget and Finance service areas to have a “community-informed” report with potential funding scenarios ready by December. 

The move comes weeks after the Oregon Legislature’s 2025 session ended with a whimper, with legislators failing to pass a long-anticipated transportation funding package. PBOT was counting on a robust state funding package to fund $11 million in basic maintenance and operations work. Without the increased funding from the state, PBOT says it won’t be able to complete projects including streetlight repairs, traffic signal upgrades, and basic safety improvements like pothole repairs. 

Thanks to President Trump’s reconciliation bill, PBOT will also lose out on $38 million in federal funding it was counting on for the Broadway Main Street project. Hundreds of millions more in federal transportation grants are at risk due to Trump’s anti-DEI directives.  

“Portland's transportation system is facing a critical funding crisis, [which has been] compounding year after year…and our traditional funding sources no longer keep up with the needs,” Councilor Angelita Morillo said at the July 16 City Council meeting. “This resolution is a call to reimagine how we fund the system.” 

The resolution, which was introduced by District 4 Councilor Olivia Clark, states traditional funding sources, like fuel taxes, are drying up. Without funding, the city can’t afford to fix its “deteriorating transportation infrastructure,” creating poor street conditions that “disproportionately impact vulnerable communities.” 

Councilors say the resolution and forthcoming comprehensive report  “lays the groundwork for long-term improvements in infrastructure, safety, and quality of life throughout Portland.” 

It’s unclear what, exactly, the potential alternative funding scenarios will be. But it’s likely that a transportation utility fee, or “street fee,” will be one option on the table. PBOT leaders have long weighed implementing a utility fee for services, requiring residents and business owners to pay a small monthly charge for transportation like they do for trash services and water. 

Right now, PBOT is mainly funded by parking revenue, gas taxes, and DMV fees. These funding sources keep PBOT financially beholden to car drivers, contradicting the bureau’s work to get people to adopt other means of transportation. A transportation utility fee would provide PBOT with reliable revenue that isn’t dependent on people driving gas-powered vehicles. 

But such a program would likely be very controversial, as it has been when leaders have floated it in the past. Steve Novick, a current City Council member who was the commissioner in charge of PBOT during his first stint in City Hall, promoted a transportation utility fee in 2014 without success. PBOT leaders weighed introducing a similar utility fee in 2023, a particularly dire budget cycle for the bureau, but it was deemed a political non-starter. 

Other potential funding streams might resemble the recommendations given by the Pricing Options for Equitable Mobility (POEM) task force four years ago. The POEM task force was convened specifically to look at the use of pricing in “creating a more equitable and sustainable transportation system.” The task force recommended strategies like dynamic parking pricing (the cost would be higher as demand increases) and road usage charges, which they said were likely to motivate people to ditch their cars for more climate-friendly modes of transit. 

Portland City Council adopted the POEM task force’s recommendations in 2021, but none have been implemented so far. 

This week, councilors were all on board with the resolution seeking new transportation funding sources. Councilor Clark, who chairs the City Council’s Transportation and Infrastructure Committee, is more conservative about taxes than some of her Council colleagues—she was one of the councilors who voted “no” on a budget amendment to raise fees on people using services like Uber and Lyft, with the revenue going to PBOT. 

Clark wasn’t present at the July 16 meeting, but Councilor Dan Ryan—no big fan of taxes himself—called the decision to support the resolution “a no-brainer,” considering “the current state of our roads and everything that we're looking at and experiencing right now.” Councilors’ support for the initiative will be tested if they actually have to vote to approve new revenue sources for PBOT, but that’s a problem for a later date. 

In the meantime, city leaders hope the Oregon Legislature will get its act together. The resolution also calls on Governor Tina Kotek to call a special session and pass a statewide transportation funding bill “as soon as possible.” 

“This is really urgent. It's absolutely wild that our state Legislature had one job, which was to pass the transportation package, and they failed to do that,” Morillo said at a Transportation Committee meeting earlier this month. “I’m sorry [to the ODOT employees] who may not have employment, and also that our infrastructure is going to crumble because our leaders failed to meet the moment.” 

Other city staff expressed support for the resolution, and discussed the impacts the legislative failure would have on PBOT’s operations. 

“The failure of the state transmission packet was more than a missed policy opportunity. It was a missed lifeline for aging infrastructure, for equitable access, for sustainable growth and for public trust,” Priya Dhanapal, deputy city administrator for the Public Works service area, told the Committee.  “Without those funds, we are left to make choices, and the road ahead is harder now, but the responsibility has not changed. We owe it to the people of Portland to be honest about what's at stake and the stable, sustainable funding our city needs."