The Eugene City Council voted in favor of a 3-cents-per-gallon fuel tax increase earlier this year, but Eugene residents will have the final say when voting booths open for the Nov. 6 special election. Ballot measure 20-132 will raise the city fuel tax from 5 cents per gallon to 8 cents per gallon if passed by voters, bringing in an additional $2 million annually for city road repairs.
If the city fuel tax is raised to 8 cents, it will be the highest of the 12 Oregon cities with a local gas tax. Six cities impose a 3-cents-per-gallon tax, and five cities charge 2 cents or less, according the Oregon League of Cities. Currently Eugene imposes a 5-cents-per-gallon fuel tax, but due to an escalating backlog of repairs and maintenance work for Eugene’s roadways, the Council Subcommittee on Transportation Funding Solutions recommended a package of revenue options to address the city’s funding dilemma including the fuel tax increase.
Fueling A debate
Eugene residents will vote for a city fuel tax increase of 3 cents per gallon in the Nov. 6 special election. Ballot Measure 20-132 will increase the city’s fuel tax from 5 cents per gallon to 8 cents per gallon if approved, giving Eugene the highest city fuel tax in Oregon.
Both sides of the pump
City councilors face a mounting backlog of repairs and maintenance to Eugene’s roadways totaling $170 million, and the fuel tax increase is one part of a plan to reduce that amount.
Opponents argue a city fuel tax increase will push drivers to fill up in Springfield, where city gas tax is 3 cents per gallon, or to other Lane County areas, to save money. Local station owners will lose business, opponents say, and the answer they suggest is a state fuel tax increase of 10-14 cents per gallon. Currently Oregon has the lowest state fuel tax of the seven western states.
The proposed fuel tax increase has prompted opposition from several local fuel station owners. The Oregon Petroleum Association also joined the debate by providing the legal and political muscle for their cause. With the help of the OPA, local fuel station owners gathered the necessary 5,300 signatures last summer to put the tax on the November ballot for a public vote.
“We’re opposed to all local taxes on gasoline, but we actually are in favor of an increasing amount of state tax that the cities receive,” OPA lawyer Paul Romain said. “It needs to go up another 14 cents per gallon to reach what Washington state’s tax is, which is an comparable level for Oregon.”
But with no guarantee of a state fuel tax increase, Eugene city officials are doing what they can to address the city’s lengthy list of street repairs.
Almost 64 percent of Eugene’s roads need some type of treatment, whether it be full reconstruction of a road or just a hot-tar Band-Aid known as a slurry seal, according to a recent Public Works Department report on road conditions. The city’s backlog of repairs has grown to $170 million, and will increase unless the subcommittee’s recommendations are implemented.
The city spent $5 million in preservation work this year, but needs to spend $7.5 to 9.5 million annually just to keep the backlog monster from growing any larger. The City Council’s goal is to spend $18 million annually, reducing the $170 million in road repair projects to $122 million by 2016. The city can reach that goal if the fuel tax is passed and the three other recommendations are implemented.
“This is the best year we’ve had to fund pavement preservation because the City Council allocated $1.5 million from the general fund, but that was a one-time thing and we’re still way below the level we need to be at,” Eugene Public Works spokesman Eric Jones said.
The three other recommendations include a street utility fee, a street and bike path lighting fee, and a capital local option levy. Together, these three fees will garner nearly $14 million of the city’s $18 million annual goal for road repairs.
Oregon was the first state to implement a statewide fuel tax to fund transportation, and from 1982 to 1993 the tax rate increased 11 times. But that increase stalled in 1993, when it reached its current rate of 24 cents per gallon. That gives Oregon the lowest fuel tax rate of the seven western states , but it falls in the middle of the national average.
Local fuel station owners fear that if Eugene raises its city fuel tax to 8 cents per gallon, drivers will just head to Springfield – where the fuel tax stands at 3 cents per gallon – or another Lane County station to fill up. The OPA has been trying to lobby the state to increase its fuel tax, and Romain said they have some powerful allies on their side.
“Our solution should be a statewide gas tax where all the dealers in Oregon will pay the same tax and competition will be fair,” Ron Tyree, a leading opponent of the city gas tax increase, said. Tyree owns Tyree Oil, a petroleum distributor based in Eugene.
“It’s an unfair injury to the station dealers in Eugene, and the gasoline sales volume the city hopes to generate will deteriorate because once people have to pay the tax they will just go elsewhere to save money,” he said.
The 76-branded gas station Tyree owns and operates on 29th Avenue and Willamette Street has lost 42 percent of its business after the 2005 increase of 2 cents per gallon Eugene City councilors implemented, and many other stations may face similar reductions if the tax increases, Tyree said.
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