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City delays gas tax decision, meeting Aug. 14

The Dalles City Council agreed Monday to put off a decision about proceeding with a gas tax proposal until its members know the direction Wasco County will take with a property tax measure to fund road work.

The city will revisit the gas tax issue at a special meeting, which will take place at 5:30 p.m., Thursday, Aug. 14, at City Hall, 313 Court Street. By that time, they expect to know whether the county commission is going to send a property tax request to voters in November.

With the state looking at a 5 cent increase in the gas tax next year and the Obama Administration seeking a 12 cent increase in the federal tax, city officials have expressed doubt about passage of a local measure.

They have been pursuing an increase in the local tax from 3 to 6 cents to generate extra funding for a backlog of street projects.

In a follow-up interview, Mayor Steve Lawrence said, if both agencies decide their respective measures have little chance of passing, they may look into other funding options.

“If neither of us end up doing something in November, we will probably be looking at the possibility of increasing the vehicle registration fee sometime next spring,” he said.

Before that happens, Lawrence said the council will be going “A to Z” through the general fund budget to see if capital can be found to cover the costs of street improvements.

“We need to know exactly where the money is coming from and, when it is transferred, what is done with it,” he said. “From that, we’ll have an opportunity to see if there is money in the general fund that we could use for that work.”

At the July 28 meeting, he asked Chuck Covert, a member of the county’s road advisory committee, what the deadline would be if the city decided to reconsider inclusion in the road district.

He said later that some council members seemed interested in revisiting that idea so he wanted to find out if it was an option.

“We would recommend you move quickly, within the next week or so,” said Covert. The council opted out of the road district in June due to the negative effect inclusion would have on Mid-Columbia Fire District’s budget.

The fire district, because of state law that caps the total amount of taxes that can be collected, which is called compression, stands to lose more than $200,000 per year. Chief Bob Palmer told the council that loss would result in a reduction in manpower and services.

Although other agencies, such as Northern Wasco County Parks and Recreation District, would also take a hit from compression with formation of the district, their losses would not be as high as the fire district’s.

Compression occurs when a property’s tax bill exceeds the legal limit of $5 per $1, 000 of a property’s real market value for education or $10 per $1,000 for general government. Once that happens, the amount collected is reduced uniformly among taxing agencies.

Nolan Young, city manager, recommended the council pursue an increase in the gas tax instead of joining the district. He felt the 3 cent-per-gallon suggested hike stood more of a chance of passage because it put the burden of paying for street improvements on everyone who used city streets, and not just property owners.

At Monday’s meeting, Alex Hattenhauer, representing a fuel distributing company based in The Dalles, said the council’s revenue from local and state gas taxes, as well as registration fees, was now 20 percent higher than in fiscal year 2010-11.

“The choices you folks make have a big impact on the city,” he said. “I’m not sure who pushed the envelope on the gas tax but it should come from the council.” Resident Debra Richelderfer told the city that Thompson Street and many others were in disrepair, which made it hard to support more taxes. She said the city was always looking at ways to transfer the financial responsibility of infrastructure improvements onto citizens instead of making wise choices with the tax dollars it collected.

“The cost of gas is my problem, the city can’t maintain streets and that’s my problem,” she said. “It’s always financially my problem.”

Hattenhauer said any increase in the gas tax should be done at the state level. He said that created a level playing field among fuel companies because the tax was uniformly applied.

Information provided by Young showed that funding from the local fuel tax had gone up $1,544, a 0.38 percent increase since 2010-11. State revenue, after a 6 percent increase in 2009, had risen from $554,319 in 2010-11 to $807,340 in 2013-14.

Councilor Tim McGlothlin asked Young for clarification about whether the county tax measure and city tax proposal, if both are approved, would appear on the same fall ballot.

Young said the gas tax issue would be brought only before the city electorate. He said the county tax matter would be decided by voters living outside the city limits and not be on the ballot for citizens outside the municipal boundaries.

Lawrence said if city officials were unsure about putting the gas tax issue before voters in November, they could delay a decision and bring a measure forward in the May primary election.

Julie Krueger, general services director, said there would be no charge to the city for either ballot. If the council decided to proceed with the November election, she said action would have to be taken by early September.

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