The City of The Dalles has opted out of a county-led proposal to form a road district funded by property taxes.
Instead, the municipality is likely to ask voters in November to approve an increase in the local gas tax of 3 cents per gallon.
Two motions to partner with the Wasco County Commission in formation of the district — one a phase-in of taxes over a five-year period — died on the table at Monday’s city meeting.
At that point, the council decided to go with the recommendation of Nolan Young, city manager.
He believes it is fairer for all motorists to pay for maintenance of the roads they drive on than have property owners bear the burden.
The city receives about $450,000 per year from the existing 3-cent-per-gallon local gas tax and Young has suggested that amount be doubled to 6 cents.
The city also receives $810,000 from the state gas tax and, when a share of water and wastewater fees are factored into the budget for road work, the city has about $1.4 million in revenue to work with each year.
Young said annual expenses are running about $1.5 million.
At the heart of the council’s decision was a drastic reduction to Mid-Columbia Fire District’s budget due to compression if the city became part of the road district.
“I’m just not willing to put Enterprise Zone monies toward building a fire tower and (equipping) a second facility and then take the money for staffing away,” said Mayor Steve Lawrence.
The fire district stood to lose more than $200,000 per year, which Chief Bob Palmer said would have brought a reduction in manpower and services.
“That would have just been devastating for us,” he said in a follow-up interview.
“We just wouldn’t have been able to make it up.”
Although other agencies, such as Northern Wasco County Parks and Recreation District would also take a hit from compression with the formation of the district, the losses were not as high as those for the fire district.
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, essentially “squeezing” each, and at times resulting in significant revenue losses.
City officials concurred Monday that the way to decrease the negative impacts of compression, a growing problem for area agencies, is to expand the property tax base through economic growth.
Councilor Tim McGlothlin said the more taxes that local governments impose to gain revenue, the greater the risk that entrepreneurs will be repelled by the higher cost of doing business.
The city’s decision has sent the Wasco County Commission back to the drawing board to redraft the road district proposal that is likely to see the assessment on property go higher.
The plan before the June 9 council meeting was for $1.23 per $1,000 of assessed value on properties throughout the county.
Because more than half the residents of the county live in The Dalles, the road district boundaries will have to be adjusted to exclude those properties, which will necessitate an adjustment of the assessment.
Commissioner Steve Kramer was present at Monday’s meeting to ask for a decision so the county could meet state timelines to bring the issue before voters this fall.
In a follow-up interview, he said the advisory committee had floated an assessment of a little more than $2 per $1,000 of valuation if the city opted out of the district, and that figure will now have to be revisited.
He said the federal government created the funding shortfall for road maintenance and improvements by not following through on its commitment to rural counties.
When timber harvests in national forests declined due to environmental regulations and safety net funding that made up for lost revenue from the end of timber harvests, he said local governments were left on their own to find replacement dollars.
“We have an answer from the city now and can move forward,” he said Monday.
“It’s going to be tough, but this is an issue of us taking care of ourselves locally because our federal government has not.”
Kramer said the city of Antelope has signed on to the district and decisions are expected soon from Dufur, Maupin, Mosier and Shaniko. Once it is known which cities will participate, he said numbers can be crunched and a formal proposal put together for voter approval or denial.
The county is seeking $1.6 million to cover maintenance and repair costs on 300 miles of paved road, 400 of gravel and 120 bridges.