Governor Tina Kotek signed a new state transportation funding package into law on Monday, more than a month after the Oregon Legislature passed the bill during a dramatic, extended special session. Later that day, two state legislators and an anti-tax advocate filed a petition with the state in hopes of sending a referendum on the bill’s tax increases to Oregon voters. 

The transportation funding bill, House Bill 3991, is expected to raise about $4.3 billion over the next decade to fund statewide transportation maintenance and operations. Without the funding, the Oregon Department of Transportation (ODOT) says it would have to lay off hundreds of employees, and cut crucial services including winter snowplowing on state highways. City and county governments would also lose out on transportation funding, as would transit agencies. 

“This bill helps us to keep state highways and local roads safe and open to traffic while preserving transit service and halting the pending layoffs of essential transportation staff,” Kotek wrote in her signing letter for the bill. “The people who came together to solve this crisis do not always agree, but they all recognized the urgency of the situation. Oregon families were counting on us. Our economy was counting on us. Our communities were counting on us.” 

Kotek’s letter did not address the possibility of a referendum on the bill, which opponents have been discussing for months. While the transportation funding package was backed by public sector unions, transit agencies, and some local government leaders, it faced serious opposition from Republicans in the Legislature, who effectively rallied critics to speak out against the bill. Democratic leaders in Salem made several attempts to pass a much larger funding package during the Legislature’s regular session earlier this year, but they were stymied by pushback from members of both parties. 

Democrats in the state House and Senate finally approved a bill, whittled down to a shell of its former self, in October. The environment was so partisan that Cyrus Javadi, one Republican representative who voted in favor of the bill, re-registered as a Democrat after the vote. 

The bill that was ultimately approved includes a 6-cent gas tax increase. It also raises vehicle registration and title fees by $42 and $139, respectively, and increases the state’s payroll tax that funds public transportation systems by 0.1 percent. The payroll tax increase is set to sunset at the beginning of 2028. 

Now, three of HB 3991’s opponents have filed a petition to refer parts of the bill back to voters next November. Oregon Representative Ed Diehl and Senator Bruce Starr, both Republicans who represent rural districts on either side of Salem, are two of the co-filers. The third is Jason Williams of the Taxpayers Association of Oregon, an anti-tax advocacy group. They believe if given the chance to weigh in, Oregon voters would reject the tax increases. 

The filers say they’ve already organized thousands of Oregonians to help collect signatures for the referendum. Still, it will be a challenge to collect the required number of signatures—78,116—by a deadline of December 30. 

“Oregon people were overwhelmingly opposed to these new tax and fee increases. I feel strongly that our job is to represent them and we need to come up with a solution,” Diehl told the Mercury. “This is the last option we have to stop these taxes and fees from going into effect.” 

The referendum wouldn’t include all elements of the bill. It would specifically target the tax and fee increases, but wouldn’t touch the bill’s language changing the diesel fuel tax and weight-mile tax paid by truck drivers, which was praised by state trucking industry leaders. It would also maintain the bill’s additional registration and road usage fees for electric and hybrid cars. 

Kotek’s delay in signing the bill put the petitioners under a particularly tough timeline. State law gives them 90 days after the Legislature adjourns to collect enough valid signatures to qualify for the ballot. But petitioners seeking a referendum also must wait for the bill to be signed into law before collecting signatures. Kotek waited almost as long as she was legally allowed to before signing the bill, narrowing the window to only 50 days. 

Those involved with the referendum effort say it was cynical of Kotek to wait so long before signing the bill. But they also think they have momentum on their side. 

“Unlike most petitions I have done over the past 30 years, people are reaching out to us,” Williams said in a statement to the Mercury. “This is evidence that the tax is viral and much hated.” 

If opponents succeed in their campaign to collect enough valid signatures by December 30, the state would delay implementation of the taxes until voters weighed in on the referendum. This would be a major setback for ODOT, which is relying on the revenue to fill a $300 million budget gap. 

Many transportation advocates across the state weren’t gung ho about HB 3991, having hoped for a much larger and more robust funding package that would pay for safety and transit improvements. But that doesn’t mean they’re on board with a referendum. 

“Taxpayers aren’t dumb. They’re tired of waste and broken promises, but they’ll gladly invest in a safe, complete system that works for everyone, no matter their income or zip code,” Sarah Iannarone, executive director of The Street Trust, said in a statement. “This referendum isn’t about protecting Oregonians: it is about defunding safety for kids walking to school, dismantling transit service, and blocking modernization projects that Oregon desperately needs."