The Oregon Department of Transportation says key funding for a massive Portland highway project is in serious jeopardy after Congressional Republicans passed a sweeping domestic policy bill last week.

In an email Monday, project spokeswoman Rose Gerber acknowledged for the first time the bill “appears to eliminate federal grant funding” that would account for around $450 million the state had banked on to complete the I-5 Rose Quarter Improvement Project.

Agency leaders say they plan to move forward with the work anyway.

A state-funded phase of the proposal to widen and cap the freeway as it winds through Portland is scheduled to break ground next month. That portion accounts for small fraction of the project’s estimated $2.1 billion price tag, the vast majority of which is now in question.

“ODOT is committed to this project,” Gerber wrote. “The federal spending bill just passed, and we are analyzing it to understand its impacts. We expect to know more in the coming weeks.”

The sprawling Rose Quarter project has been a lingering trouble spot for ODOT ever since 2017, when lawmakers dedicated hundreds of millions to see it completed.

What began as a $450 million proposal to widen the freeway to ease a freight bottleneck eventually ballooned in scope — and cost.

As currently conceived, the project would also construct a cap over a portion of Interstate 5. That addition is aimed at stitching back together the historically Black Lower Albina neighborhood, which was torn apart when the freeway was built in the 1950s and 60s. It also added roughly $1 billion to the project’s price.

The cap has been lauded by community advocates such as the nonprofit Albina Vision Trust, which is leading the push to redevelop the area and says the project is a necessary correction to a decades-old injustice. At the same time, anti-highway activists have opposed the idea of widening the freeway at every juncture, including with a pair of ongoing lawsuits.

But the biggest hurdle the project now faces is funding — particularly after lawmakers failed to pass a bill that would have dedicated hundreds of millions to the Rose Quarter’s completion.

The acknowledgement that federal grant money is in question amounts to a sudden detour for ODOT. Despite widespread speculation that the Congressional budget bill would tank the grant, Gerber insisted as the Senate passed it last week there was “no indication that the grant dollars are not available for construction.”

That changed after President Donald Trump signed the so-called “One Big Beautiful Bill Act” on July 4.

Among its many provisions, the bill rescinds any “unobligated” money doled out under a federal initiative known as the Neighborhood Access and Equity Grant Program. It’s through that program that ODOT was awarded $450 million last year — money that was principally meant to go toward constructing the highway cap.

“This award allows the once-in-a-generation I-5 Rose Quarter Improvement Project to move forward,” ODOT said at the time.

But though Biden administration officials greenlit the money, very little of it has actually arrived. According to the federal government’s own accounting, just $37.5 million has been “obligated.”

There is widespread confusion as to whether that means the remaining $412.5 million will be pulled back.

“If anybody tells me they know exactly what the federal administration is going to do, I’d say, ‘I question your sanity,’” said Lee Beyer, vice chair of the Oregon Transportation Commission, which oversees ODOT.

Beyer was a key figure in moving the Rose Quarter project forward. In 2017, as a Democratic state senator, he helped lead the effort to pass a transportation bill that funded the project.

Beyer said repeatedly Tuesday that ODOT still has legislative direction to move forward, despite a potentially gaping funding hole.

“The commission is very supportive of the Rose Quarter project,” he said. “At this point we have no knowledge to change that direction.”

That could change, he conceded, when the transportation commission meets later this month.

“We’ll obviously have to consider [the federal funding] and probably make a decision about whether we proceed or not,” Beyer said. “I suppose we could take a pause and ask for clarification from the Legislature and the governor.”

The Albina Vision Trust, the nonprofit leading the effort to redevelop the area above and around I-5, is projecting optimism. JT Flowers, the organization’s director of government affairs, said last week the project has become a national model for community-led urban redevelopment. That, he believes, will ensure its long-term success.

“We don’t have definitive answers on this at present,” Flowers said. “What we can say is that this project remains a priority — not just for the state of Oregon and the city of Portland, but for the entire nation.”

Others disagree. Joe Cortright, a Portland economist and longtime opponent of freeway widening, went so far as to declare the project dead in a post on his website last week.

Cortright said Tuesday it was “breathtaking” that ODOT might move forward with the project at the same time it is grappling with a funding hole that could result in mass layoffs.

“It’s incomprehensible to me that you embark on spending on a project that you don’t have probably three quarters of the money for,” he said.

State lawmakers failed to pass a multi-billion-dollar transportation package in this year’s legislative session that would have filled in some of the Rose Quarter’s current uncertainty. A bill favored by Democrats would have dedicated $125 million a year to finishing it and another major highway project.

Whether that money is truly off the table remains to be seen. Gov. Tina Kotek has signaled in recent days she might call the Legislature back into special session to take another crack at road funding.

News Source : https://www.opb.org/article/2025/07/08/big-beautiful-bill-interstate-5-rose-quarter-oregon-transportation-portland/