Taxing Our Gas
Ballot Measure 20-132 in perspective
BY TED TAYLOR
The Eugene ballot arriving in mailboxes this week includes Measure 20-132 locking in an additional 3 cents a gallon to the current city fuel tax of 5 cents a gallon. The purpose of the tax increase is to enable the city to make better progress on a reported $170 million backlog of street repairs. Below are some facts, figures and statements that might help voters make a decision on this complex issue.
• The Eugene fuel tax has been on the books since 2003 at 3 cents, and was raised another 2 cents in 2005. The latest tax hike was due to sunset this year. The City Council’s move to raise the tax to 8 cents and make it permanent led to a referendum to put the tax on the ballot. Springfield has a 3-cent fuel tax and the county has no fuel tax.
• The 8-cent fuel tax the city attempted to raise was part of the recommendations in May by the Council Subcommittee on Transportation (CST) to deal with an estimated $170 million in street maintenance backlog. Other sources of potential revenue suggested by the committee included a street utility fee based on parking spaces, a street and bike path lighting fee, a local option levy, a solid waste collection fee surcharge, and a city vehicle rental tax.
• The current tax is raising about $3.4 million a year, but Eugene’s streets are deteriorating more quickly than the city can keep up with, even with $6 million a year in state funds included, plus $1 million a year from the county/City Road Partnership Agreement that ends after this year. Public Works also gets about $600,000 a year from transportation system development charges, and this year got a one-time $1.5 million infusion from the city’s general fund/property taxes.
• The new tax is expected to raise an additional $2 million a year. The CST figures it will cost between $8.5 million and $10.5 million a year to begin “to buy down the backlog of reconstruction street projects at a reasonable level and time frame.” The committee estimates it would cost about $27 million a year to eliminate the backlog within 10 years. City Councilor Chris Pryor told a City Club audience recently that it would take $18 million to $20 million a year to “make progress on the backlog.”
• In addition to dealing with the backlog on reconstruction, the city is spending about $9.3 million this year on operations and maintenance, says Eric Jones of Public Works. O&M includes patching potholes and cracks, street light work, signage and striping. Revenues for this work amount to $7.7 million, leaving a deficit of $1.6 million being paid from road operating fund reserves.
• O&M and reconstruction are separate budget items, but linked in reality. It’s four times cheaper to repair and resurface cracked pavement than to wait until potholes develop, according to Public Works.
• The cost of repairs on certain street projects has increased 70 percent in the last two years, according to the CST. The report cites increased fuel and energy costs, a 50 percent hike in the cost of asphalt, and the rising demand for concrete and other construction materials.
• Eugene’s many miles of bike and walking paths are also deteriorating.
• The Oregon Petroleum Association is lobbying against the tax, favoring an increase in the statewide fuel tax and weight-mile tax so that truckers traveling through the state or delivering loads within Oregon will pay more of their fair share of the maintenance burden. Mile-for-mile, a heavy truck will cause thousands of times more damage to roads than a car.
• The stated backlog of $170 million is debatable. The figure is based on what it would cost to bring all Eugene streets and roads to like-new condition. Six years ago Public Works hired an independent consultant who estimated a backlog of $67 million.
• Opponents of the tax say the disparity between Eugene’s proposed 8 cent tax and Springfield’s 3 cent tax and the county’s no tax will hurt Eugene service stations. Paul Romain of the Oregon Petroleum Association says one Eugene station lost 42 percent of its business after the first gas tax was implemented, and overall fuel sales are down in Eugene in recent years even though miles driven are up. “People are buying gas elsewhere,” he says. City records show fuel tax receipts both up and down in recent years.
• In response to the lost business argument, Pryor says fuel prices vary widely in Eugene and he doesn’t think many people will go out of their way to save a few pennies a gallon. This week, according to OregonGasPrices.com, the lowest regular gas price in Eugene is $2.83 at Costco, and the highest is $3.21 at HP Car Wash at 18th and Willamette.
• In 2002 a countywide fuel tax was proposed, but Eugene backed out of the proposal, according to Romain. A countywide tax would have eased the inequities between cities and captured more truck fuel taxes, he says.
• Romain says imposing a higher fuel tax in Eugene will discourage citizen support for a higher statewide tax, but Pryor says 14 other communities in Oregon already have fuel taxes, and he thinks that will “make it easier to pass a higher statewide tax. Meanwhile, we got ourselves in a pickle and we have a street problem and need to fix it.”
• “One thing’s for sure,” says Eric Jones, “the less we invest in street repairs, the more the backlog grows.”