Traffic on U.S. Highway 97 in Bend in September.

The Oregon Legislature’s failure to pass taxes and fees to lift struggling transportation revenues has left Central Oregon agencies and advocates wondering — and worried — about sustaining roads and services in the growing region.

The most immediate impact is that the Oregon Department of Transportation will lay off 600 to 700 employees, according to an email the agency’s director sent to staff on Saturday.

In a statement sent to The Bulletin, the agency said “deep and painful cuts” will begin in the next few weeks.

The Legislature adjourned its six-month session on Friday without passing a transportation funding package. The funding became a hallmark of the 2025 session as ODOT had warned for years about an upcoming breaking point as revenue from gas tax declined and inflation ballooned costs.

Some have called on Oregon Gov. Tina Kotek to hold a special legislative session to come up with a solution.

Kacey Davey, a spokesperson for ODOT in Central Oregon, said the agency does not yet know the exact number of layoffs or how many will be in Bend and Central Oregon. Davey said people should expect cuts to maintenance services — including plowing this upcoming winter — though it’s not clear yet exactly how much.

“These cuts will harm Oregon’s transportation system, Oregon’s travelers, and the operational health of the agency,” ODOT said in the statement.

The local agencies that maintain roads and provide transportation services won’t feel the same sudden impacts. But in the next few years, ODOT cutbacks could lead to local governments scrapping or delaying construction projects, scaling back paving and plowing, increasing local fees and halting planned bus route expansions.

A bulk of the Legislature’s $14.6 billion, 10-year transportation bill would have bolstered funding for the State Highway Fund, which is split between the state, cities and counties for road maintenance, including paving, plowing, restoring bridges, culverts, bicycle and pedestrian infrastructure, and fixing other items like rumble strips, signals and unstable slopes.

The bill’s failure won’t affect Bend’s maintenance operations this year, said Russell Grayson, chief operations officer with the city. But without a revenue fix from the state, Bend residents could end up paying more for maintenance.

Bend tacked a transportation fee onto customers’ monthly utility bills last year to supplement falling maintenance revenues, charging from $5 to $10 per household to hundreds of dollars for businesses. The city doubled the fee starting July 1 with hopes to generate $10 million in its second year.

The city had planned to raise the fee again next year. When conversations progressed around the state’s transportation bill, it looked as though the city might receive an additional $6 million to $8 million per year for maintenance, which could have alleviated the need for increased fees, Grayson said.

But the city fee hike — along with other local transportation funding paths — are back on the table, Grayson said.

Deschutes County also relies heavily on state funding for maintenance, with limited options for local funding. Chris Doty, director of the county’s road department, called the bill failure “very disappointing.”

“While we are not at the same crisis level (as) ODOT, we are not that far behind,” Doty said in an email Wednesday.

Counties across Oregon had pushed the Legislature to secure consistent funding, citing deficits for maintenance and construction, although the situation in Deschutes County is not as dire as other places, and county roads are in good shape.

Because the county prioritizes funding for maintenance over construction projects, it may have to delay projects in its five-year construction plan. If the Legislature does not come up with a fix in the next few years, the county will not have enough funding for current maintenance levels, Doty said.

The transportation package failure won’t hurt transit services this year, said Bob Townsend, director of local transit agency Cascades East Transit. The agency expanded bus routes in Bend last month as the outset of a broader plan to bolster the underutilized service. It looked as though transit would get a big boost under the transportation bill proposal. A payroll tax increase in the bill would have allowed the local agency to double the frequency of buses in Bend, slashing wait times from 30 or 45 minutes to 15. It also would have allowed expansion of routes between cities. 

“Without future increases in transit funds it will be challenging to keep up with rising costs,” Townsend said in an email.

Brian Potwin, executive director of alternative transportation nonprofit Commute Options, said the lack of transportation funding is a “big concern.”

“Central Oregon is growing fast, and without state support, we risk falling behind,” Potwin said in an email.