Oregon voters have forced a high-stakes rethink of the state’s transportation funding strategy by halting scheduled hikes to gas taxes and vehicle registration fees through a referendum petition. The move temporarily blocks key pieces of a $4.3 billion package and guarantees that the Oregon Increase to Gas Tax, Payroll Tax, and Vehicle Registration Fees Referendum will dominate the 2026 ballot.
The petition drive, led by opponents under the No Tax Oregon banner, has turned what began as a technical fix for agency budgets into a broader fight over who should pay for roads, bridges, and public transit in a state already wrestling with affordability pressures.
How a petition stopped Oregon’s transportation tax hikes
The confrontation traces back to House Bill 3991, a sweeping transportation law the Oregon Legislature passed to stabilize funding for the Oregon Department of Transportation, cities, counties, and transit agencies. The package raised the state’s gas tax by six cents, increased several DMV and title fees, and boosted the payroll tax to support public transportation, all framed as a way to avert layoffs and keep projects moving for the Oregon Department of Transportation. According to state summaries, the Oregon Increase, Gas Tax, Payroll Tax, Vehicle Registration Fees Referendum, formally titled the Oregon Increase to Gas Tax, Payroll Tax, and Vehicle Registration Fees Referendum (2026), is designed to let voters decide whether those hikes should stand or be repealed after the 2026 election, which is why the Oregon Increase is now central to the state’s fiscal debate.
Opponents organized quickly, arguing that the new costs would land hardest on working drivers and small businesses already squeezed by inflation. Petitioners with No Tax Oregon gathered signatures to challenge the transportation law, and Petitioners with No Tax Oregon paused those scheduled tax and fee hikes by turning in their signatures, a move that also put an estimated $1.2 billion for 2029-31 in projected revenue at risk for road maintenance and operations. Supporters of the original bill counter that House Bill 3991, which Gov. Kotek and lawmakers crafted to close a $354 million gap in transportation funding, was meant to prevent deeper service cuts and that the payroll and gas tax increases were structured to spread the burden across the system.
Inside the No Tax Oregon campaign and the veto referendum
The petition drive was not a narrow, insider effort but a broad mobilization that reached into communities across the state. Around 250,000 Oregonians signed a referendum petition that will refer the gas tax, registration fee hikes, and title fee increases to the November 2026 ballot, a show of force that far exceeded the threshold needed to qualify. A separate tally from election officials found that No Tax Oregon turned in more than 191,000 signatures to the Secretary of State’s Office on Dec. 12, and the Elections Division verified 163,451 of them, or about 85 percent, which was enough to place a referendum on the 2026 ballot and immediately pause most of the increases that had been scheduled to take effect.
The political impact was immediate. Oregonians will not see gas tax and transportation fee hikes at the start of the year as opponents secured enough signatures to send the issue to the ballot, a development that state leaders acknowledge is a major setback for Democrats who spent much of the year assembling the package. A voter referendum to repeal Oregon gas tax and vehicle fee increases has now officially qualified for the November 2026 ballot, ensuring that the Oregon Increase to Gas Tax, Payroll Tax, and Vehicle Registration Fees Referendum will be decided alongside other high-profile races. The veto referendum will ask Oregon voters to decide whether to repeal a gas tax increase and other parts of the transportation bill in November, turning a complex funding formula into a simple up-or-down choice.
Funding fallout, Kotek’s reversal, and what drivers face next
The pause in new revenue has already forced a reckoning inside state government. Oregon Gov. Tina Kotek, who initially backed the $4.3 billion transportation package, is now publicly urging lawmakers to repeal the transportation bill before voters weigh in at the ballot, warning that the current stalemate leaves the Oregon Department of Transportation without a stable plan. In a separate appeal, Oregon Governor Tina Kotek has called for repeal of Oregon’s transportation package and asked legislators to return in the February session to craft a slimmer, short-term plan that can keep basic maintenance and safety projects funded while the larger fight over taxes plays out.
Agency officials are blunt about the stakes. In regional briefings, Kotek has said that “These decisions won’t be easy. There will be tradeoffs and consequences. Hundreds of people will be laid off this spring and some DMV field offices will close on March 8” if lawmakers do not replace the stalled revenue. Transportation staff have fielded questions such as “What about the fees that already went up?” and, as one ODOT spokesperson explained, the Oregon Legislature passed House Bill 3991 in September 2025 to provide transportation funding for ODOT, cities, counties, and transit agencies, while also directing the agency to ensure customers were not overcharged as some registration fees increased Dec. 31, 2025. Select portions of the bill took effect on December 31, including some registration hikes and title fee increases, even as the broader gas tax and payroll tax increases were frozen by the petition.
For drivers, the result is a confusing patchwork. Some registration fees increased Dec. 31, 2025, under the new structure, while other planned hikes are on hold until after voters decide the Oregon Increase to Gas Tax, Payroll Tax, and Vehicle Registration Fees Referendum in 2026. Advocates for the package note that the registration fee structure was intended to ensure all vehicle owners pay an equitable share, with higher charges for heavier and more road-wearing vehicles, and that Oregonians Reject Gas Tax and Registration Fee Hikes Through Petition may leave the state scrambling for alternatives if the referendum succeeds. A petition against Oregon transportation law pauses gas tax and fee hikes has already forced planners to revisit which projects can move forward, and letters to the editor have highlighted that the petition to stop the gas tax and other fee increases gathered double the signatures necessary, signaling deep skepticism about raising costs at the pump and DMV counter.
Even as the legal and political maneuvering continues, the ballot language is locked in. The Oregon Increase to Gas Tax, Payroll Tax, and Vehicle Registration Fees Referendum (2026) will ask voters whether to approve or reject the Oregon Increase, Gas Tax, Payroll Tax, Vehicle Registration Fees Referendum that lawmakers tied to the transportation package, and Oregon gas, payroll tax increases will be on the ballot in 2026 as part of that decision. For now, Oregonians from every corner of the state who spent their holiday gathering signatures have succeeded in blocking immediate gas tax and registration fee increases through petition, but they have also guaranteed that the next chapter in the state’s transportation story will be written at the polls rather than in a committee room.
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