The Eugene City Council voted unanimously Monday to move forward in instituting a business license tax of three cents per gallon on fuel dealers, a move that will likely affect both businesses and consumers.
The tax was the second aspect of a two-pronged, $9-million strategy developed in 2001 to increase revenue for operation, maintenance and preservation of Eugene’s roads.
The move will impose a three-cent tax per gallon on all gas distributors within city limits. For a gas station charging $1.50 per gallon, the city would receive three cents for each gallon sold. The same station would likely have to raise prices by at least three cents per gallon to maintain similar
revenues prior to the surcharge.
While City Councilors generally supported the overall proposal, amendments were introduced and passed before the ordinance itself was approved.
Ward 4 City Councilor George Poling proposed an amendment to decrease the tax from four cents — which was the originally proposed amount– to three cents, saying it would give the county the ability to opt-in later at the same level.
“I think by bringing this down by one penny … is not a significant amount,” he said.
Ward 1 City Councilor Bonny Bettman spoke against the amendment, saying the legislative intent of the gas tax was to reduce the burden that citizens will bear with the transportation system maintenance fee, and thus decreasing the tax would be counter-productive.
The amendment narrowly passed 4 to 3.
Earlier in the hearing, Ward 3 City Councilor David Kelly proposed an amendment to the ordinance’s language clarifying that the funds generated would strictly be used for repair, maintenance, operation and preservation of the transportation system — not for building new roads or funding capacity enhancement projects.
Ward 2 City Councilor Betty Taylor agreed.
“I would not support a gas tax to build new roads,” she said.
The amendment passed 6 to 1.
City Councilors already approved the first part of the funding strategy — a transportation system maintenance fee — that will charge a monthly fee based on the average amount of trips generated by homes and businesses. The city had hoped EWEB — which already collects a handful of charges for the city — would gather the TSMF. Officials from the energy company declined the request, however.
City officials estimate charges for the TSMF will begin in July, and implementation of the gas tax will take at least three to six months.