The Week Observed: December 12, 2025

What City Observatory Did This Week

ODOT’s systemic financial crisis. City Observatory director Joe Cortright testified to the Oregon Transportation Commission on December 11, 2025. The Oregon Department of Transportation faces a systemic financial crisis stemming from chronic mismanagement. The agency consistently overestimates revenues while underestimating costs, committing to projects without secured funding and using debt to mask these problems.

• Revenue over-estimated and collapsing: HB 3991 bailout likely repealed; anticipated toll revenues for Abernethy bridge never materialized; $750M federal grant for I-5 Rose Quarter denied; Trump administration clawed back $450M; $2B for Interstate Bridge Replacement at risk

• Cost overruns far exceed inflation: I-5 Rose Quarter quadrupled ($450M to $2B); I-205 Abernethy tripled; Interstate Bridge Replacement estimates approaching $9-10B

• Poor governance: “Extend and pretend” approach assumes funding will magically appear; Sixty percent of IBR budget is freeway widening, not bridge replacement

• Needed reforms: Commissioners must act as “adults in the room,” adopt “don’t start what you can’t finish” principle, and implement long-term systemic fixes rather than project-by-project bailouts

Must Read

There’s enough research on induced demand, it’s time to act on the concept. Chris McCahill of the State Smart Transportation Institute argues its time to acknowledge that the concept of induced travel has essentially been proven in the literature, and its time to incorporate this finding into policy. Induced travel means, basically, that a 1 percent increase in road capacity leads to a 1 percent increase in automobile travel, a finding that’s been replicated by a wide range of studies.

McCahill points out that while the science of induced travel is established, it isn’t reflected in transportation planning practice. In effect, induced travel is baked in to the way projects are framed, in a way that precludes looking at alternatives that would facilitate less car travel:

Right now, though, the system is stacked against these multimodal alternatives. As we’ve written before, forecasts tend to overestimate traffic more often than they underestimate it, signaling that induced demand is already built into many of our assumptions. That, in turn, locks in past development patterns and keeps us on an auto-dependent path.

Because these assumptions are buried deep in complex and opaque models, there’s virtually no opportunity for the public and community leaders--who are increasingly aware of the induced travel effect--to question proposed highway projects, or advance lower VMT alternatives.

Road capacity and traffic speed. Todd Litman at ...