Local tax on gas is towns’ way to fix roads

VENETA, Ore. – Its streets are decaying and there is no help in sight from the state, so this rural town west of Eugene is considering doing what several Oregon towns and cities have done: passing a local gasoline tax.

The City Council will decide on Monday. They figure the 3-cent-a-gallon tax would raise $45,000 a year, not much toward an estimated $3.6 million backlog, but a start.

Eugene is the largest of almost a dozen Oregon cities to add a local tax since Measure 5 passed in 1990, limiting revenue from property taxes.

Veneta City Administrator Ric Ingham said few objections were raised when it was discussed at two recent meetings.

With Veneta’s share of revenue from the state gas tax largely flat and traffic and road repair needs increasing, Ingham said the city has few options.

If the problems get worse, he said, repair costs will go out of control.

Oakridge, with just one gas station, and Florence, on the coast, approved local taxes this month.

“All we know is that we have more repair needs on our roads than we have funds to repair,” Oakridge City Administrator Gordon Zimmerman said.

The additional $30,000 a year money will allow the city to tackle road work on one block annually.

John Tapogna, managing director of the economic consulting firm ECONorthwest, said smaller cities may have an easier time selling a local tax because residents may see a clearer connection between what they pay and what they get and also may be more like-minded in their desire for city services.

Tax limitation measures and voter rejection of a general income tax increase have added to the maintenance problem.

“I think what you’re seeing is just a continuation of a trend that started with the implementation of Measures 5 and 50 that limited property taxes,” Tapogna said.

“Localities across the state have increasingly turned to targeted user charges that more directly tie the benefits of the service to the actual people that are using it than we had in the past.”

An advantage of a gasoline tax is that visitors will pay some of it.

Ingham said increased fuel efficiency is one factor that has kept state revenues flat.

“Obviously, with all the tax limitation measures that passed in the 1990s, it very much restricted the amount of resources cities have to address roads, let alone public safety and the other things,” Ingham said.

“So we’ve kind of been digging ourselves a little bit of a hole ever since then.”

Andrea Fogue, a senior staff associate at the League of Oregon Cities, said communities across the state have similar problems.

“The bottom line is that we have a severe backlog in road maintenance, and it’s extremely difficult without some type of local revenue in addition to what they receive from the state gas tax to even begin to address that backlog,” she said.

“And on average it costs three to four times more to go in and reconstruct or fix the damage than it would have if you were able to maintain those roads.”