How Oregon pays for public transit

In 2017, Oregon lawmakers passed House Bill 2017, a transportation package that included a new tax to help pay for public transit. They put the money in the Statewide Transportation Improvement Fund, usually called STIF. The fund could support more frequent buses, lower fares and routes reaching places with limited service.[4, PDF p. 116][4, PDF p. 117]

The original tax was 0.1 percent of covered wages: $1 for every $1,000 earned. The Department of Revenue collected it and sent the money, after collection costs and refunds, to the transit fund. The tax began in July 2018. The rules for local funding and plans took effect in January 2019.[4, PDF pp. 108–109, §122a][4, PDF p. 115, §§122j–122L][4, PDF p. 118, §122r]

Under the original law, 90 percent of the available money went to local and tribal authorities through a formula. A formula is a set of rules for calculating each recipient’s share; they did not compete for this money by submitting rival grant applications. Five percent went to a competitive grant program, four percent to services connecting communities, and one percent to technical help for rural transit agencies.[4, PDF pp. 116–117, §122n]

Local plans had to identify how the money would be used. The law listed priorities, including better service in low-income communities. It left the choice of particular services to the local planning process, subject to state approval. To find out whether a promised route actually ran, we need to compare that local plan with the provider’s service records.[4, PDF p. 117][17, PDF p. 37]

Lawmakers changed the program in 2020. Senate Bill 1601 allowed money to maintain existing service and pay the costs of operating light rail. Spending on light-rail construction or other capital costs remained excluded. The bill also merged a separate fund for transportation for older adults and people with disabilities into STIF, starting in July 2023.[15, PDF pp. 1–2, §§1–4][15, PDF p. 11, §19]

After the merger, part of the formula funding was set aside for older adults and people with disabilities, using population-based rules. The rest was divided largely according to where payroll taxes were collected, with minimum payments specified in law. Areas with more taxable wages and areas with greater transportation needs therefore entered the calculation in different ways.[15, PDF pp. 2–3, §5][17, PDF pp. 31–32, §§2.6.1–2.6.2]

The legislature sets the tax and the uses allowed by law. Local and tribal authorities propose how to spend their shares. The Oregon Transportation Commission must approve their plans before the state releases the money. The Oregon Department of Transportation, or ODOT, handles payments and reporting.[4, PDF p. 116][15, PDF p. 3][17, PDF p. 12]

State documents call a designated recipient a “qualified entity.” It can be a transit district, an eligible county or a federally recognized tribe. Its governing body appoints an advisory committee to help choose priorities. Transit providers submit proposals through that process. Some recipients run services themselves; others send money to an organization that does.[4, PDF p. 116][15, PDF pp. 3–4, §§5–6][17, PDF p. 12]

For someone asking for a new route, the local plan is a useful place to start. It identifies what the recipient wants to fund. State approval allows those projects to receive money, up to a specified maximum. Approval does not guarantee that the full amount will arrive: actual payments also depend on how much money is available under the formula.[17, PDF pp. 33–35, §§2.6.5–2.6.6]

Money can also be saved for later. The rules allow recipients to carry funds into a later budget period for approved uses, such as a vehicle purchase or an operating reserve. A balance may reflect planned saving or a delayed project. The local plan and spending records are needed to tell which.[17, PDF p. 33][17, PDF p. 34]

Recipients must check the work of providers they fund. That includes reviewing invoices and comparing service delivered with service promised. ODOT can inspect these records. The rules tell us who is responsible for checking; completed reviews would tell us what they found and whether problems were fixed.[17, PDF pp. 35–37, §2.6.9]

For July 2023 through June 2025, ODOT reports receiving $307 million for STIF and sending $283 million to local and tribal recipients through the formula program. These cover two years, a period Oregon budget documents call a “biennium.” The figures describe money arriving at the state and money leaving it for recipients.[8, PDF p. 4 / report p. 2]

A payment to a transit agency can sit in its account before the agency uses it. Paying a driver or a vehicle supplier is a later transaction. If we add the state’s payment and the agency’s spending, we may count the same dollar twice. The $283 million tells us what ODOT sent out through the formula program; provider accounts are needed to show what was spent afterward.[8, PDF p. 4][16, PDF pp. 2–3]

What about the $24 million difference between $307 million and $283 million? The formula program is only part of the fund. Other payments and money carried over from earlier years also matter. The summary report does not give the complete account needed to determine how much was left at the end of June 2025.[8, PDF p. 4][15, PDF p. 2][16, PDF p. 2]

ODOT also reports awarding more than $13.5 million in competitive grants and $10.8 million for connections between communities. An award is an agreement to fund a project; payment can happen later. The report says some competitive-grant payments cover awards from three different budget periods. These award figures cannot simply be added to the $283 million as money paid out during 2023–25.[8, PDF p. 4][8, PDF p. 7 / report p. 5, footnote 5]

There is an earlier estimate to compare with the results. In 2017, legislative analysts forecast $302.6 million in payroll-tax revenue for 2023–25, or $291.3 million after deductions. But the later $307 million total covers a fund that had grown to include other revenue, such as portions of cigarette taxes and ID-card fees. We need a breakdown by revenue source before deciding whether the payroll tax brought in more than expected.[7, PDF p. 1][17, PDF p. 12]

ODOT asks recipients to report their cash at the start of the period, incoming payments, spending and remaining cash. Those completed reports are missing from this collection. They would let us check how much reached providers, how much providers spent, and how much they saved for later. The detailed accounting notes below explain how to combine those reports without counting transfers twice.[16, PDF pp. 1–3]

ODOT reports that formula funding paid for 34.8 million rides in 2023–25. A ride is one trip: someone who takes the bus regularly appears in the total many times. Across the STIF programs, providers also bought or replaced 183 vehicles. That includes replacements for older vehicles, so it does not mean fleets grew by 183.[8, PDF p. 4][8, PDF p. 10 / report p. 8]

In Tillamook, the transportation district used STIF money to help overcome staffing and equipment shortages after a dialysis clinic announced its closure in February 2024. ODOT says the district helped patients reach treatment as far away as Lincoln City and Forest Grove. Here, transit funding helped people reach a service their town was losing.[8, PDF p. 8]

On the southern coast, ODOT describes a different use: Curry Public Transit’s Coastal Express. The report says STIF helped support a 122-mile route from Smith River to North Bend, running three times a day, six days a week. It connects with other services for travel beyond the route. These are services described in ODOT’s report, rather than schedules checked for today.[8, PDF p. 7]

Providers reported $48 million spent on more frequent buses in low-income communities and $38 million on expanding routes and service in those communities. The chart below shows those and six other categories. ODOT says this table leaves out some STIF spending, so its categories cannot give us the program’s total cost.[8, PDF p. 6 / report p. 4, Table 1 and footnotes 2–3]

For a particular town, the questions are more specific. Did the bus run at the hours people needed? Were trips reliable? Could people get home afterward? The statewide report gives examples of services, but answering those questions requires local schedules, operating records and accounts from riders.[8, PDF p. 7][17, PDF p. 37]

ODOT’s reported ride count rose from 18.4 million in 2021–23 to 34.8 million in 2023–25. The department points to recovery from the pandemic and the merger with the program for older adults and people with disabilities. It also says improvements in data collection changed some figures.[8, PDF p. 1][8, PDF p. 4]

Adding another program changes what is being counted. Some trips can enter the STIF total because the funding program was renamed or merged, even if the service itself continued unchanged. To find out how much service actually grew, we would need to compare the same providers and kinds of trips across both periods.[15, PDF p. 11][17, PDF p. 10][8, PDF p. 4]

The report also describes rising operating costs. In the Rogue Valley, it says the transportation district suspended most STIF-funded routes beginning in September 2025 because future funding was uncertain. That was after the two-year period covered here. ODOT’s explanation still needs checking against the district’s budgets and board records to establish what drove the cuts.[8, PDF p. 11 / report p. 9]

The statewide figures show that STIF helped pay for services. They do not tell us how many of those services would have existed without it, or whether each provider could afford to keep them running. Those questions require a longer record of provider finances and service changes.[8, PDF p. 4][8, PDF p. 10][16, PDF p. 2]

ODOT has tried to get a clearer picture of recipients’ finances. Its November 2023 instructions asked for better cash-balance reporting. The department’s May 2026 report describes further rule changes adopted in January 2026, with full implementation expected in 2027–29. Their results fall outside this account.[16, PDF p. 1][8, PDF p. 6]

House Bill 2017 also funded highways. ODOT reports that money separately, including revenue, planned projects and payments. Its June 2026 report warns that the systems use different reporting calendars. A project listed as funded may still have work and payments ahead of it.[18, PDF pp. 4–6, executive summary and reporting basis]

This page covers the transit fund. Following highway maintenance money will require matching each funding decision to the work performed and the payments made. The highway report is available in the source collection for readers who want to examine that account.[18, PDF p. 5]