LEAGUE OF WOMEN VOTERS of LANE COUNTY
EVERYMEMBER MATERIAL October, 2007

City of Eugene Ballot Measure 20-132

CITY GAS TAX

Question: Shall City increase Business License Tax Paid by Motor Vehicle Fuel Dealers by Three Cents Per Gallon?

SUMMARY: The city currently imposes a business license tax on motor vehicle fuel dealers for the sale of motor vehicle fuel. The tax provides funding for the reconstruction, repair, maintenance, operation, and preservation of City streets. If the voters approve this measure, the city business license tax paid by motor vehicle fuel dealers will increase by three cents per gallon. Revenues from this three cent increase will be used for the reconstruction, repair, maintenance,
operation and preservation of streets in the City.
A yes vote approves this measure increasing the City gas tax.

LWVLC BACKGROUND RESEARCH:

In January, 2003, a three-cent-per-gallon local motor vehicle fuel tax was approved by the Eugene City Council. This revenue was dedicated for a Pavement Preservation Program (PPP). In January, 2005, the Council approved a two-cent increase along with a sunset provision that would remove the two-cent tax in February, 2008. Any further Council action on the two-cent
tax is pending. In August, 2007, the Council referred a new three-cent gas tax to the November ballot.

In February, 2006, a Council subcommittee reviewed potential revenue strategies to address funding needs for road repairs and recommended a package which included the three-cent fuel tax, a ten-year capital local property tax levy, a street-utility fee, and a street-lighting fee. The voters must approve the fuel tax increase and the capital local property tax levy if the city is to raise an additional $16 million dollars annually to carry through on the proposed improvements. A
backlog for street repairs is estimated at $170 million.

The current measure’s three-cent increase on motor vehicle fuel sold in the city will be paid by vehicle fuel dealers and passed on to the consumer. The tax applies to gasoline, diesel, biodiesel, ethanol blends, propane, and compressed natural gas used to operate motor vehicles.

SUPPORTERS SAY:
. The gas-tax increase will provide an additional estimated $2 million in revenue for street repair and maintenance per year and will help to alleviate the $170 million backlog of repairs. Deferred maintenance costs more than timely repair.

. A gasoline tax makes logical sense, as there is a direct connection between
the people who drive on streets and those who pay a fuel tax.

. Visitors and commuters to Eugene who buy gas in the city will help pay for the
maintenance of city streets.

. There is a wide disparity of gas prices in the Eugene metropolitan area currently, thereby dwarfing the three-cent gas tax increase and making it virtually inconsequential in terms of where gas is purchased.

OPPONENTS SAY:

. The gas tax for the City of Eugene will create an unfair playing field, taxing stations within city limits while stations outside the city pay lower or no local taxes

. The tax will result in less fuel sold in the city, placing local gas station owners and their employees in jeopardy.

. The tax is bad policy and is not sustainable. Drivers, including residents, commuters and visitors will avoid buying their fuel in Eugene and migrate to stations outside the city limits decreasing the revenue received to help pay for the maintenance of city streets.

. The revenue needed for road repairs in Eugene and throughout Oregon should be obtained from increased gas taxes at the county and/or state level.

SOURCES:

Becky Carlson, Public Works, City of Eugene
Eric Jones, Public Works, Eugene
Ron Tyree, Tyree Oil, Inc.
Alan Zelenka, Eugene City Councilor
Council Subcommittee on Transportation Funding Solutions, Final Report
May 23, 2007, City of Eugene
2007 Pavement Management Report, Public Works Department, City of Eugene
Gas Tax Q & A, August 13, 2007, City of Eugene


Research: Janet Calvert and Kathy Ismail, Voter Service Committee, LWVLC