PORTLAND, Ore. (KATU) — Voters rejected Measure 120, a major transportation funding package that would have raised gas taxes, by a large margin in vote returns released on Tuesday night.
83% of voters said no while nearly 17 percent said yes.
The Associated Press called the race shortly after 8 p.m.
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The increase in taxes and was aimed at stabilizing the state’s transportation system.
If it had been approved by voters, Measure 120 would have increased Oregon’s gas tax by six cents per gallon, raise vehicle title and registration fees, and temporarily increase the statewide payroll tax used to support public transit systems.
Lawmakers approved the package during a special legislative session last fall, arguing the state needed new revenue to avoid deep cuts at the Oregon Department of Transportation and keep up with rising maintenance costs.
Supporters said the measure would help fund basic transportation needs across the state, including fixing potholes, repaving roads, repairing bridges, maintaining snow plow operations, and supporting DMV services.
ODOT has repeatedly warned lawmakers that the agency is facing a long-term funding problem as construction and labor costs continue to rise while gas tax revenue levels off.
PREVIOUS COVERAGE: Oregon plugs $297M ODOT budget hole, but long-term funding fight remains
State officials said part of that slowdown in gas tax revenue is tied to improving fuel efficiency and the growing number of electric vehicles on Oregon roads.
If voters had approved Measure 120, the tax and fee increases would have taken effect, providing ODOT and local governments with additional long-term transportation funding.
State leaders said the money would have helped stabilize day-to-day maintenance and operations, though officials have acknowledged the package would not fully solve the agency’s long-term financial challenges.
Lawmakers already shifted money around during the 2026 legislative session to close a nearly $300 million budget hole at ODOT in the current funding cycle.
Because of that move, a rejection of Measure 120 would not mean immediate cuts to services.
However, transportation officials say the agency still faces a significant funding gap in future budget cycles, raising concerns about possible layoffs, reductions in maintenance work, and cuts to services if lawmakers cannot secure additional revenue.
Even if Measure 120 passes, lawmakers from both parties have indicated transportation funding will likely remain a major issue during the 2027 legislative session.
If voters reject the measure, the proposed increases will not take effect, meaning Oregon’s current gas tax and DMV fees would remain unchanged.
The Road to Get Here
The debate over transportation funding has spanned multiple legislative sessions and become one of the biggest political fights in Salem over the past two years.
At the start of the 2025 legislative session, Democratic leaders proposed a much larger transportation package that included a 20-cent increase to the state gas tax, significantly higher DMV fee increases, and a permanent payroll tax increase for public transit funding.
But the proposal struggled to gain enough support in the Legislature.
Because tax increases require a three-fifths supermajority vote in Oregon, lawmakers spent months negotiating smaller increases in hopes of securing enough votes to pass a package.
Despite scaling back parts of the proposal, lawmakers were unable to finalize a transportation funding solution before the end of the 2025 session.
That failure triggered warnings from ODOT about potential layoffs and threats to winter road maintenance and other services.
Gov. Tina Kotek later called a special legislative session to find a compromise.
After one of the longest special sessions in Oregon history, lawmakers ultimately passed the transportation package that became Measure 120.
After Kotek signed the bill last November, opponents quickly launched a referendum campaign to put the issue before voters.
Supporters of the petition gathered more than 200,000 signatures, more than double the number required to qualify the measure for the ballot.
