A new transportation: Here’s what you need to know about HB 3402

Move over House Bill 2025, there’s a new transportation bill in town. As it appears the Democrats big transportation bill is dead in the water, there’s a scramble to stuff transportation policy into a separate bill in order to come away with at least something this session.

HB 3402 is a classic “gut and stuff” — meaning it was filed as a placeholder just in case lawmakers needed it. And boy do they ever as I’ve confirmed that HB 2025 doesn’t have the votes in the Senate to pass.

So what’s in HB 3402? Here’s what I know so far:

• Performance audits on the State Highway Fund and ODOT capital projects once every two years.
• Changes how the ODOT Director is appointed (by the Governor, instead of the Oregon Transportation Commission). This is a relatively useless clause that has been rightfully identified as an “accountability charade” by City Observatory.
• The bill beefs up and clarifies the roster of an ODOT accountability advisory committee.
• It gives the Joint Committee on Transportation legal authority to “review of scope, schedule changes, and budget updates of major projects (those exceeding $250 million) on a quarterly basis, as well as of city or county projects of less than $25 million with a requested cost increase of at least 10 percent and projects exceeding $25 million where the requested increase is at least five percent.” This seems to me like a way to take some authority away from the Oregon Transportation Commission and give it to legislators.
• Increases the statewide gas tax by three whole cents (LOL) — from 40 cents per gallon to 43 cents per gallon.
• Increases annual fee for registration of passenger vehicles from $43 to $64.
• Increases vehicle title fee from $77 to $168.

All revenue from the above gas tax and fee increases, an estimated $2.3 billion, will flow directly to ODOT.

That last provision is huge, because it means cities and counties would be totally zeroed out in new state funding. Portland Mayor Keith Wilson has wasted no time in expressing his opposition to it: “After more than a year outlining the tremendous need at the local level, House Bill 3402-3 threatens to sideline local authority and transit priorities at a time when collaboration is most needed,” he wrote in a statement at 2:00 pm today.

Here’s more from Wilson:

“Portland operates Oregon’s second-largest transportation system, which supports millions of people and goods moving in and out of the state. This bill puts that system at risk. It jeopardizes dozens of essential city infrastructure jobs and our ability to perform basic safety functions like filling potholes and implementing traffic safety improvements.

We can’t afford a patchwork solution. Legislators, please don’t leave Salem without addressing crumbling city transportation systems. We’re calling on our state partners to lean into our shared commitment to building a resilient and future-ready transportation network for all Oregonians.”

The City of Portland’s budget for the Portland Bureau of Transportation is counting on $11 million from the state. That funding was expected to come from the state via a new transportation bill — and this one won’t do it.

Beyond not including the 50/30/20 funding formula that counties and cities rely on, HB 3402-3 includes none of the safe streets or transit funding that was in HB 2025. As far as I know, the 0.1% payroll tax that funds transit (via the Statewide Transportation Improvement Fund) which went into effect in 2018, doesn’t have a sunset date. It was proposed to go up to 0.3% in HB 2025. Transit agencies across Oregon have made it clear that without an increase, they would make significant service cuts.

In a post on Bluesky today, The Street Trust urged their followers to oppose the bill. The group’s executive director Sarah Iannarone wrote that, “After a year of consensus building, lawmakers are about to pass HB 3402, a last-minute bill that keeps the lights on at ODOT and turns them off for everyone else.”

Here’s more from Iannarone and The Street Trust:

“This is not a transportation package. It is a desperate procedural maneuver that prioritizes a single agency’s short term needs over the public good – jeopardizing safety, mobility access, and equity. It does nothing to address the rising traffic violence on our streets, the erosion of critical transit lifelines, or the lack of safe infrastructure for people walking, biking, rolling, and relying on public transportation.”

Also notable about HB 3402-3 is that it includes no dedicated funding for key highway megaprojects that remain unfinished like the I-5 Rose Quarter, Abernethy Bridge, I-205 widening, and so on. These projects were funded in HB 2017 and there has been very strong political will to complete them. While this new bill doesn’t include set-aside funding for them, since all new revenue would go to ODOT, the agency could decide to spend it on them. However, it appears that since the bill gives the JCT oversight of ODOT project spending, that decision could be more political than the agency is used to.

ODOT supports HB 3402-3. In a letter sent today to members of the House Committee on Rules, ODOT Director Kris Strickler said the bill is an “interim step to maintain some level of ODOT’s operations and maintenance functions for the 2025-27 biennium.”

HB 3402-3 is scheduled for a public hearing in the House Committee on Rules at 3:45 pm today. That committee includes two of the loudest voices who opposed HB 2025 — its Vice-Chair Rep. Christine Drazan and Rep. Shelly Boshart Davis. (Note: I’m hearing it will be moved to Joint Committee on Transportation Reinvestment.)

UPDATE, 8:05 pm: HB 3402-3 has passed the House Rules Committee with a party-line vote of 4-3 and will now move to the House floor for a vote. The bill will raise $2.0 billion from a mix of a gas tax increase and registration and title fee increases. See the table below for details…