Salem's streets need $11 million more per year just to stop deteriorating, Public Works Director Brian Martin told the City Council at a Monday, Aug. 17, work session that laid bare the city's growing transportation funding crisis.

"We're continuing to fall behind," Martin said.

The city needs roughly $28 million annually to maintain its 1,302 lane miles of streets, 826 miles of sidewalks, 198 signalized intersections and an estimated 70,000 street trees. Current funding covers about $17 million, according to Salem Business Journal. The Transportation Services Fund is rated "Critical" in the city's five-year forecast and is projected to go negative by fiscal year 2029.

Salem's pavement condition index dropped from 68 in 2018 to 61 in 2022, sliding from "good" to "fair." The share of streets rated poor or very poor grew over that period. Getting the system back to "good" would cost roughly $41 million per year, a gap of nearly $24.7 million above what the city spends now.

The problem traces largely to one revenue source. About 72% of the Transportation Services Fund comes from the State Highway Fund, which depends on gas taxes that haven't kept pace with rising costs. Salem spends less per lane mile than most comparable Oregon cities, according to the work session agenda, and staffing levels have been flat since 2019. Neither the mayor nor the council president attended the session; councilors selected a presiding officer pro tem.

A state transportation package passed in 2025 would have sent Salem an additional $4.5 million per year starting in fiscal year 2027. Voters repealed that legislation in the May 2026 primary.

What comes next

Councilors did not approve any new tax or fee Aug. 17. The session was informational. Revenue options presented include a local fuel tax, a street utility fee based on vehicle trip generation, voter-approved bonds, local improvement districts, an urban forestry fee, a sidewalk maintenance fee and a countywide vehicle registration fee.

A local fuel tax would require voter approval. Some fees could be enacted by the council after study and public engagement. Salem tried a streetscape fee in 2002, but voters overturned it by referendum in 2003 before any money was collected.

Councilors also raised whether funding should better reflect the growing use of Salem streets by delivery companies and other commercial traffic.

The city's financial roadmap calls for research and study phases in October through December 2026, with revenue options heading to the Council Finance Committee for evaluation. Community outreach would follow before any proposal advances.

The city's 2026 pavement-condition data has been delivered and is being processed, though updated results have not yet been released. Those numbers will show whether the decline has continued since the 2022 survey.

At the state level, Gov. Tina Kotek's Rebuilding Transportation Vision Workgroup launched a public survey on Aug. 14, open until Sept. 10, to gather input on transportation priorities. The workgroup is set to deliver recommendations to the governor in December to inform the 2027 legislative session.