Portland officials call new state transportation package a short-term boost, not a solution

Portland city transportation officials told the Finance Committee on Nov. 17 that the recently passed Oregon state transportation package gives the city a necessary near-term infusion of funds but will not solve long-standing revenue shortfalls.

"We are estimating that in this fiscal year, PBOT will receive about $10,600,000," said Melissa Williams, director of the Portland Bureau of Transportation. After other baseline adjustments from ODOT and Multnomah County, Williams said the package yields a net increase of about $19.5 million next year, which, after accounting for the $11 million already budgeted this year, leaves roughly $8.5 million in new resources starting in fiscal year 2026–27.

Priya Dhanapal, deputy city attorney for Public Works, described the outcome as "welcome" but cautioned it is “just a stopgap.” Williams repeated the caution, saying the package "will very quickly likely lose ground again" because it does not index to inflation. "Unlike versions of the state package that did not ultimately pass, the amount will not go up again in future years to keep up with inflation," she said.

Williams outlined immediate benefits and limits: the new money eliminates the need for additional position reductions this fiscal year and covers about $11 million that PBOT had already assumed in the FY25–26 budget, but she also flagged persistent maintenance liabilities such as unaddressed streetlight poles, signage replacement, and pothole response. She said several major safety programs — including Safe Routes to School and Great Streets — went unfunded in the session.

Committee members pressed for clarity on how the dollars would be applied. Vice chair sought a line-by-line reconciliation showing what is backfill versus what is new; PBOT finance clarified the partial-year nature of the current-year allocation and how next year’s net increase is calculated. Councilors also pressed whether the bureau’s forecasted 7% annual inflation assumption was city-derived; PBOT finance said the city economist supplies that factor because personnel, benefits and internal service costs drive that internal estimate higher than external CPI measures.

Williams noted an additional uncertainty: petitioners have 90 days from the legislature’s adjournment to gather signatures to refer the package to the ballot. "There is an effort to refer this bill to the voters," she said, and that risk affects near-term planning.

What happens next: PBOT and finance staff said they will continue to analyze trade-offs between maintenance and capital, provide district-level project lists to councilors, and likely return to the Finance Committee in January with budget implications depending on the referral outcome and updated forecasts.