The Dalles City Council has tabled — for now — asking voters in November to approve a 3 cent per gallon increase in the city gas tax to pay for street improvements.
On Monday, the elected body decided to continue its conversation with the county about formation of a road district. Funding for the district would come from assessments on private properties within Wasco County.
City officials want to get more details about how a joint proposal would work before deciding whether to move forward with a gas tax measure.
Nolan Young, city manager, said that decision will have to be made sometime in August in order to get the tax issue before voters in the fall. The city has to hold a public hearing before adopting a resolution that calls for an election and then publish notice of a ballot title and file necessary paperwork with the county clerk by Sept. 5. If approved, the city gas tax would go up from 3 to 6 cents as of Jan. 2, 2014.
Councilor Tim McGlothlin said it was important that citizens know they had the final say if the gas tax proposal made it to the ballot.
“The council is not raising the gas tax. Our [voters] are being asked to approve or deny increasing the gas tax to improve roads,” he said.
Doug Hattenhauer, owner of a fuel distributing company in The Dalles, told city officials that he would actively fight any gas tax measure that was proposed at the local level. He said a statewide tax was the only equitable way to impose higher fees because cities that have a local tax are not then forced to compete with cities that don’t.
“A 6 cent gas tax is unfair to the business owners of The Dalles and the public in general,” he said. “I think you are wasting your time. I don’t think the citizens of The Dalles will support a new gas tax.”
After reviewing the city budget, Hattenhauer said he believed there were expenditures and contingency funds that could be eliminated or cut back to generate more money for street improvements. He asked why city officials would consider borrowing money that had to be repaid with interest when they had other financial options.
“There’s all kinds of money sitting there so you don’t have to go out and borrow $6.1 million,” he said.
Young has recommended the gas tax proposal because it “has the best chance of success” with voters. He said it was also more equitable to have visitors also paying for use of area roadways instead of putting that burden only on property owners.
“Of the two separate measures, we feel the property tax really isn’t a good source for the city to rely on,” he said.
He also wanted the city to stay away from a property taxing measure because districts without other methods of raising revenue needed to have that option available in the future.
Under Measure 5, which was approved by Oregonians in 1990, the amount of tax that can be obtained from property taxes is capped. Taxes for education (not including bonds) can’t exceed $5 per $1,000 of a property’s actual, or real market, value. Those for general government can’t exceed $10 per $1,000.
When a property’s tax bill exceeds the legal limit, it’s reduced uniformly among agencies. Temporary levies are compressed before taxes that fund permanent districts, such as a library, fire or parks district.
The initial discussions between county and city officials have centered on an assessment of properties that generates about $2 million per year. The city would receive $750,000 of that funding and the remaining $1.25 million would be used by the county to cover the loss of federal funding for roadwork.
The county’s revenue for maintenance and repair of 700 miles of highway has fallen from $3.75 million per year in 2006 to $2.5 million in the current fiscal year. The reason for that drop in funding is the loss of federal compensation for logging cutbacks in national forests. Timber receipts were once shared with counties that had a large non-taxable amount of land base under public ownership. But a series of environmental regulations enacted in the 1970s and 1980s have led to a drastic decline in harvest levels.
Young said doubling the current 3 cent per gallon local tax could net the city $6.1 million over a 20-year period. The tax would yield about $450,000 more in revenue each year to repay debt service on a revenue bond for repair of main arterials and about 60 blocks of dilapidated streets.
The city will also receive another $826,000 from its share of the state gas tax this fiscal year for maintenance of 88 miles of streets within town.
Young said about 60 percent of roadways are in poor condition and currently need some level of repair. He said for years the city has put off that work due to budget constraints but it is time to get that work done. Once the city gets caught up on projects, Young said a preventative maintenance program can be enacted to pare down the high cost of rebuilding a street that has fallen into disrepair.
Dave Anderson, city public works director, estimates it will take seven years to finish the project list if the current gas tax is doubled.
Councilor Linda Miller wants the city to restructure how its urban renewal dollars are spent to cover the cost of infrastructure improvements within the specified boundary, which is currently the downtown blocks. She said the money was used for that purpose in the 1990s when the Columbia Gateway Urban Renewal District was formed but later changed to be more project-focused.
City attorney Gene Parker said a public hearing would need to be held and a resolution approved before urban renewal dollars could be used differently. Miller said that idea needed to be explored to cover some of the city’s costs for street upgrades.
Young said other taxing districts that would be affected by redistribution of urban renewal funding needed to be consulted before action was taken.
Mayor Steve Lawrence said using urban renewal dollars for street improvements in the downtown area would free up money from the road fund for use in other sectors of the city.
Councilor Dan Spatz said he would be opposed to having urban renewal dollars diverted from revitalization efforts.
“I think they should be used for what they are now,” he said.
Spatz, Miller and the rest of the council were in agreement that a decision for the gas tax proposal be put off until a meeting had taken place with county officials.
“I’ve wanted to meet with our counterparts at the county for a long time but that has not happened yet,” said Councilor Bill Dick.