Kotek's ODOT layoff bluff

The governor promised immediate layoffs without a tax hike, but has "delayed" them to continue to threaten Oregonians with cuts she is uniquely unlikely to make

Governor Tina Kotek at the moment she told the House Rules Committee on June 27, “I have in my hand the layoff plan that has to happen starting on Monday without passage of revenue to address the ODOT budget.” There were no layoffs Monday, and Kotek has delayed them pending a special legislative session Aug. 29.

Governor Tina Kotek yesterday made good on her threat to haul lawmakers back to the Capitol for a special session to vote on tax hikes she says are necessary to continue to employ around 500 Oregon Department of Transportation employees whose jobs, she insists, will really, truly be cut this time if lawmakers again fail to do as she instructs. The special session is set for August 29, the friday before Labor Day weekend.

When last we heard from Kotek on the subject of ODOT funding, she was threatening the House Rules Committee with mass ODOT layoffs if members did not approve a scaled-down three-cent-per-gallon gas tax hike. This was a last-ditch effort by Kotek to scrounge up some revenue after a far more ambitious, but equally “necessary” tax bill detonated like a dynamite-strapped whale on a beach amid unusual Democratic intraparty sassiness.

Kotek’s Rules Committee testimony Saturday, June 27 was designed to put maximum pressure on lawmakers to raise taxes before the legislature was required to adjourn two days later. She told the committtee if it did not act she would lay off “600 to 700 workers who provide essential services right now” the following Monday.

It was urgent lawmakers join her in “finding a stopgap solution to prevent the immediate reduction in response and maintenance across the State of Oregon by the Oregon Department of Transportation.”

To drive her point home, Kotek said, “I have in my hand the layoff plan that has to happen starting on Monday without passage of revenue to address the ODOT budget.”

Kotek lamented the scaled-back gas tax hike would not fund transit and local governments as the original bill would have, and ended with a clear message to legislators and Oregonians:

But nonetheless we have to move forward because the moment calls on every one of us to decide what we’re going to do right now. Pass this. Make sure we can have the revenue we need for ODOT so essential services can continue. Without it, on Monday I will start the layoff process at the Oregon Department of Transportation. That is the prudent thing to do. When there is [sic] no dollars to pay for things you must downsize.

Legislators called Kotek’s bluff. They didn’t pass any tax increase at all. No one was laid off Monday. ODOT continued to provide the services - “essential” and otherwise (I presume there are no services provided by a state employee that Kotek would deem non-essential) - it had prior to Kotek’s testimony.

It wasn’t until July 7 Kotek announced 483 layoffs with more expected in 2026. The plan that she said she had in her hand June 27 had gone through some reworking, according to the Statesman Journal so that it “prioritized workers with more experience, in addition to decreasing material purchases and putting off vehicle replacements.” The result? Fewer layoffs, and later, than Kotek threatened.

Even then, Kotek used her layoff announcement as a cudgel to try to get legislators to raise taxes: “This emergency was preventable, and we still have time to intervene.”

Two weeks later, the governor herself intervened and prevented the emergency, which she previously promised would inflict pain on Oregonians June 30, then July 7, but now not until 2026 . . . unless the legislature raises taxes in the August special session.

Maybe. However, the pattern is that Kotek and her allies use layoffs as a threat the urgency of which magically dissipates once the opportunity to raise taxes has passed, only to reappear again when the opportunity arises again. Legislators might notice that pattern and expect, not unreasonably, that if they again refuse to raise taxes the threatened layoffs will not be as bad as threatened, won’t happen as soon as threatened, and maybe might not happen at all.

The legislature called Kotek’s bluff once, exposing it for what it was. Like a used car salesperson who disappears into the back to talk to the manager, she now reappears to make that final offer, the one that really is the best she can do, and she’ll throw in the floor mats to boot.

Except Kotek’s failure to make good on her threats in June and earlier this month show she lacks the leverage she wants us to believe she has. Yes, she can lay off ODOT employees if taxes don’t go up, but she absolutely does not want to.

The necessity of keeping ODOT employees working and paying union dues to the Service Employee International Union and others is paramount. After months of insisting bridges will crumble, potholes will reach the center of the Earth and the entire state will grind to a halt if the big, original tax bill wasn’t approved, Kotek showed us what is really important, and that’s keeping as many unionized people working for the state as possible.

When the big bill fell apart, Kotek and her union supporters’ last line of defense was preventing layoffs, not funding light rail or repaving highways or fixing bridges. That’s why she hustled over to the Rules Committee at the last minute. That’s why SEIU Local 503 executive director Melissa Unger, perhaps the most politically powerful person in Oregon, emerged from the back rooms in which she ordinarily functions to urge lawmakers to “either pass [the scaled-back tax hike] or do something so that people in the next two weeks across our state and in every county do not receive layoff notices.”

Kotek is on the ballot next year. Kotek needs money and organization from SEIU. The legislature’s failure to raise taxes was an unprecedented blow to the taxpayer-to-state-to-employee-to-union-to-Democrat money cycle upon which Kotek and her party depend.

If Kotek doesn’t get the next iteration of the “essential” tax hike, recent history and Kotek’s own incentives suggest she might just pull another rabbit out of the hat and avoid the layoffs once they are no longer immediately useful to cajole reluctant legislators to raise taxes on Oregonians.