PORTLAND, Ore. — Oregon Gov. Tina Kotek dropped a bombshell on Monday when she sent a letter to the Oregon Transportation Commission calling for the Regional Mobility Pricing Plan to be put on ice, abruptly halting the long-running effort to start tolling drivers along freeways in the Portland metro area.
It's technically not up to Kotek — the OTC has the authority to set state transportation policy — but the governor appoints the commission members, and OTC Chair Julie Brown and Vice-Chair Lee Beyer released statements on Monday signaling that they're on board with Kotek's new approach.
Tolls are still definitely on the way for the Interstate 5 Bridge over the Columbia River, and they may or may not still pop up on the Abernethy Bridge that carries Interstate 205 between West Linn and Oregon City, but all of the other tolls planned for the rest of the Portland sections of those two freeways now appear to be dead.
The move comes a little less than a year after Kotek issued a temporary moratorium on new tolls, pushing the start of the first tolls in the region back from late 2024 to at least January 2026. She directed the Oregon Department of Transportation to use the delay to update its financial plan and wrote in her letter this week that report shows the challenges of tolling "have grown larger than the anticipated benefits."
Tolling opponents and local elected officials have been quick to celebrate, particularly in Clackamas County, which would have been the first area to be hit with tolls along I-205. At a media briefing Tuesday morning, members of the Clackamas County Board of Commissioners said they all agreed that the pause on the tolling plan was needed.
"Our citizens did not like it," said chair Tootie Smith. "Our citizens were in an uproar. Our cities were in an uproar, and we answered the cities' concerns."
But the loss of tolling revenue carries the potential for downstream impacts on multiple other freeway projects in the region, and the Oregon Department of Transportation hasn't immediately responded to questions about what it will all mean and how those projects will replace the lost funding.
Kotek's office has pointed to the 2025 legislative session as the time when Oregon will need to tackle most of those issues as part of a major conversation about transportation funding, so some of the answers may depend on what lawmakers come up with next year.
The Abernethy Bridge project
The first tolls were set to begin as part of the I-205 Toll Project, which would have installed toll cameras on the Tualatin and Abernethy bridges to help fund a project to widen the section of I-205 between the two bridges, as well as widen and seismically strengthen the Abernethy Bridge between West Linn and Oregon City. The rest of the tolls would have come later under the Regional Mobility Pricing Plan.
ODOT announced in June 2023 that Kotek's original tolling delay would mean the I-205 project would need to be scaled back to focus only on the Abernethy improvements, which are already under construction. The tolling cameras would also be reduced to just the Abernethy Bridge. Tolls were expected to fund about $385 million of the Abernethy project's $662 million cost.
Kotek's letter didn't make it clear whether her cancellation decision applied only to the Regional Mobility Pricing Plan or if it also included the slimmed-down I-205 Toll Project. When asked for clarification, her office told KGW that the start date for Abernethy tolls has been moved back to allow time for the legislature to discuss alternative revenue sources in the 2025 session.
"Should alternatives fail to come forward, the state will either need to resume tolling operations or reallocate nearly $400 (million) from other projects," Kotek's staff wrote in an email.
In other words: ODOT technically has enough money on hand to cover the $385 million tolling portion, but the agency was hoping to use the tolls to pay itself back and put the money toward other projects.
Commissioner Paul Savas said Tuesday that it's too soon to declare total victory because the future of tolling on the Abernethy Bridge is still unclear — and he said he's worried people might not be aware of that distinction.
"The message I've been receiving is people are celebrating, when in fact what is actually being canceled is something that was going to happen long-term," he said. "Way out there, two, three, four years out, is what was cancelled. But the immediate issue is before us. It's alive. It's real. And until that's cancelled, I'm not prepare to celebrate at all."
West Linn Mayor Rory Bialostosky said he hoped to see the Abernethy Bridge upgrades completed using alternative funding sources, expressing concern about the potential for the tolls to prompt drivers to divert onto West Linn streets. County Commissioner Martha Schrader added that she still wants to see the full original I-205 improvement plan come to fruition.
The Rose Quarter Improvement Project
Kotek's office mentioned the idea of reallocating funding from other projects to complete the Abernethy upgrades, and some of that money has already been moved around.
The state legislature set aside $560 million for major road projects in a 2017 transportation package — the same package that directed ODOT to start exploring freeway tolls — and ODOT intended to use that funding for both the Abernethy project and the Rose Quarter Improvement Project, but the agency wrote in its June 2023 report that it had been forced to shift most of the balance to Abernethy to keep the project on track.
The Rose Quarter Improvement Project would widen I-5 to three lanes in each direction between the Interstate 84 and Interstate 405 junctions in Portland. It would also add a "lid" over part of the freeway segment to reconnect several blocks of the historically Black Albina neighborhood, which was split in two by the original construction of I-5.
The project has been controversial, with Albina advocates and local officials objecting to the small size of ODOT's initial lid design and freeway opponents criticizing the push to widen I-5. The freeway lid design was expanded in 2021, which brought many critics back on board but also raised the project cost. A lawsuit also forced the project to reopen its federal environmental review process in 2022.
The tolling delay and reallocation of the 2017 funds to the Abernethy project left the Rose Quarter project treading water; ODOT said last year that it had enough money to finish the environmental review process and much of the design work, but wouldn't be able to begin construction unless more funding was identified. The overall cost had grown to a range of $1.5 billion to $1.9 billion, ODOT said, and it faced a shortfall of more than $1 billion.
The dormant project got a couple of major boosts earlier this week: first, the U.S. Department of Transportation announced a $450 million grant specifically to help with the Albina lid construction, and then on Tuesday, the Federal Highway Administration announced that the project had completed its renewed environmental review process and again received a green light.
Still, the project's financial situation remains strained. The federal grant alone isn't enough to make up for the $1 billion budget shortfall, and that figure was itself based on the assumption that the project could be partially funded with toll revenue, so the loss of the Regional Mobility Pricing Plan could leave the Rose Quarter project even further in the red.
The project's future is likely to depend heavily on the outcome of the 2025 legislative session. ODOT declared in a Monday news release that the $450 million federal grant "allows the... project to move forward," but added that it would need to work with legislators next year to secure additional funding.
Oregon Trucking Association president Jana Jarvis said her industry has mixed emotions about the loss of tolling, because she had been on board with helping to shape the tolls, and truckers are tired of getting stuck in the Rose Quarter bottleneck.
"Tolling was a significant part of the revenue calculation in (the 2017 transportation package) for some of those mega projects like the Rose Quarter project, which the trucking industry is very interested in seeing addressed," she said. "So, leaves us with a bit of a conundrum."
The Interstate Bridge Replacement project
Kotek's decision doesn't directly impact the Interstate Bridge Replacement project, which is being jointly developed by Oregon and Washington and is separate from all of ODOT's other regional tolling plans. The $6 billion project will also be funded in part through tolls on the bridge, but Kotek specified in her letter that she doesn't want to disrupt that plan.
There are some indirect impacts, however. The project team had previously said they wanted ODOT to handle toll collection on the bridge to create a seamless experience for drivers who would also be paying Portland tolls. In a statement on Monday, the team said it would shift its plan and have the Washington State Department of Transportation collect the tolls, citing WSDOT's experience with the Good to Go tolling program for Seattle-area bridges and tunnels.
Critics of the IBR project have also argued that tolling the I-5 bridge without tolling the I-205 Glenn Jackson Bridge would prompt commuters to switch crossings to avoid them, potentially increasing traffic backups on I-205 and decreasing the projected toll revenue for the I-5 bridge.
The project team has pointed to the Regional Mobility Pricing Plan as the answer, because diverting to I-205 wouldn't save drivers money if they end up paying freeway tolls as soon as they cross the bridge and roll into Oregon. But if Regional Mobility Pricing is dead, that issue of diverted traffic could crop back up.
ODOT's looming budget gap
ODOT has historically been funding by Oregon's gas tax, but the agency is facing a budget crunch as gas tax revenue begins to wane, and the problem is expected to only get worse in future years as vehicle become more fuel-efficient and more drivers switch to electric cars.
ODOT has been sounding the alarm about the need for lawmakers to completely rethink the state's approach to transportation funding, and the tolling projects are one of several new funding mechanisms that have been floated or studied over the years, along with a pay-per-mile tax.
Like the gas tax, the pay-per-mile tax would have the advantage of only taxing drivers based on how much they use the roads. But it carries some thorny privacy issues, because the state would need to have a way to track the miles driven by individual cars.
There's also the possibility of increasing the gas tax beyond the current 40 cents per gallon rate, which still has some appeal because the gas tax is by far the easier of the options for the state to administer — it's collected directly from distributors, and there are only about a dozen major distributors in Oregon.
In any case, the transportation conversation in the 2025 legislative session is likely to extend far beyond any one freeway project, and Kotek's decision to hit the brakes on tolling means ODOT's deeper financing concerns will probably be put back on center stage.