The Dalles City Council will discuss doubling the local gas tax — from 3 to 6 cents per gallon — at Monday’s meeting as one way to cover the cost of street improvements.
With 60 percent of the city’s streets now in some state of disrepair, Nolan Young, city manager, believes raising the gas tax is the best way to pay for repairs. His goal is to tackle immediate public safety needs and then establish a stable revenue source so maintenance can be done before a complete rebuild is necessary.
“We need to get back on a preventative maintenance plan and get caught up with the backlog,” said Young at an April work session about the issue.
He said the city has deferred work for the past 10 years due to budget constraints but that has created a long list of capital improvement projects.
The council will consider the recommendation made by Young at 5:30 p.m. June 10 in the municipal chambers of city hall, 313 Court Street. He is asking the elected body to hold a public hearing June 24 on the issue if they are interested in moving forward with the plan.
The Dalles gasoline station owners and employees say the city’s proposal is ill timed with an economy still struggling to recover from the recession of 2008. They contend that many customers are already upset by continuing fluctuations in crude oil prices caused primarily by global market demands and interruptions in the supply distribution system.
“Where’s it going to end?” asks Ken Vipperman, who currently manages the West Third Street Chevron and owned a station on the west end of town for 22 years.
“This will put stations within the city limits at a real disadvantage because we will have to charge 6 cents more than stations just outside the city. I don’t know if people having to pay more will hurt business or not – but they sure are going to complain.”
Karina Eiesland, a gas attendant at the Shell station on East Third Street, believes the added gas tax will negatively affect local fuel providers. She said the high price of petroleum products is already forcing people on lower incomes to scale back purchases so paying even more is likely to continue that trend.
“I disagree with this and I don’t think it’s necessary,” she said.
The local gas tax currently generates about $450,000 per year for roadwork, an amount that would double for the next 20 years under the current proposal.
Young said the tax has not been raised since the mid-1980s and revenue from an increase in the charge could be used to repay a $6.1 million bond for improvements.
Even if the council ends up approving the tax increase, it cannot be enacted until January of 2014, the date set by the Legislature for future local increases.
That mandate was put into effect after the House and Senate approved a statewide tax increase of 6 cents per gallon in 2009 that took effect Jan. 1, 2011. The state tax went from 24 cents per gallon to 30 cents and was accompanied by a hike in vehicle registration, which is paid every two years, from $54 to $86. Title fees also went up from $23 to $78 and the cost of replacing lost license plates rose from $5 to $17.
The gas tax increase was one idea broached at an April 1 work session that was attended by city councilors and budget committee members. The discussion at that forum focused on ways the city could address its long list of infrastructure improvement needs.
Water and sewer system upgrades are being paid for by a series of annual increases to cover the multi-million dollar cost of planned projects. These include replacement of a wooden water line that is more than 100 years old and renovations at the wastewater treatment plant on East First Street.
An 8 percent rate hike in the water bill was adopted in 2011 and 10 percent increases planned for 2013 and 2014. The amount of increase drops to 8 percent from 2015 to 2017 and then goes back to 10 percent from 2018 to 2020.
The first 3.44 percent increase in sewer bills took place March 1 and an added charge of the same amount will be enacted each March until 2022.
In April, councilors and budget committee members talked about imposition of a 7 percent cell phone tax to raise about $180,000 per year. However, that amount of money was seen as too little to adequately address the city’s street repair needs.
Also considered was a 2 cent increase in the franchise fee charged to Northern Wasco County People’s Utility District and Chenowith Water Public Utility District. Each one-half percent increase could generate an additional $115,000 per year from North Wasco and $28,000 more per year from Chenowith.
Again, city officials felt not enough money would be realized by pursuing that option.
Discussion was given to the city asking voters to approve a $3 to $6 million bond that would be used for capital improvements.
Council and committee members alike believed there would be little chance of success in that direction because local property taxes are already high due to the number of special districts. In addition, they felt all users of the city’s transportation system and not just property owners, should bear the financial burden for repair and maintenance.