CRESWELL — City council members this week agreed the city should implement a gas tax, and said it might be too late to put the word out before the November election.
Council discussed at its work session Monday the possibility of placing a 3-cent gas tax on the Nov. 3 ballot. The tax would enable the city to collect additional revenue for the maintenance of city streets and pay for other street-related projects.
If adopted, the tax would take effect Jan. 1, 2021, and be imposed on fuel dealers when they sell or distribute fuel within the city. The tax would be paid by gas stations for the sale of gasoline and diesel.
The potential gas tax came as a surprise to local station owners. Creswell 76 station owner Bill Spencer said in a letter to council that he was surprised the city hasn’t had a conversation with either gas retailer in town about this proposed tax.
He said that with the new 76 station under construction, “a gas tax can and probably will affect our competitive position.” He said that the 76 employs more people than any other station because they “believe in full service and hiring young people. Not having a gas tax has allowed us the luxury of a generous payroll.”
Spencer said that despite potential business issues a gas tax might cause, “I am well-aware of the need for road improvement and maintenance funds,” and asked for more information. Mayor Richard Zettervall said he is working on his response to Spencer and to AM/PM management, the other gas retailer in town.
“I know we missed out on some work sessions we might have had to discuss this item and therefore would have had more public input along the way,” councilor Kevin Prociw said.
Coronavirus restrictions have forced canceled meetings and a lack of in-person interaction, said City Manager Michelle Amberg. “Meeting people face-to-face is very difficult right now and that’s part of the problem … everything has become more complicated and has been taking twice as much time to develop.”
Creswell is one of the only local cities that does not have a gas tax in place. Cottage Grove, Springfield, Veneta and Oakridge all have a 3-cent gas tax, while Eugene is up to 5 cents and Coburg is at 6 cents.
“There are about 28 local gas taxes,” said city attorney Ross Williamson. “A couple of counties and mostly cities that have their own gas taxes, and the majority just use the Oregon Department of Transportation (ODOT) to collect the gas tax. It makes it easy on the gas station to have one ODOT form to fill out and all money goes to ODOT and then is spread to local jurisdictions.”
The tax would be paid monthly by the fuel dealer. The program administration costs of revenue collection would not exceed 10.5% for the first year and 10% thereafter of annual tax revenues.
“The tax is not on the station owner, but on the delivery service that brings the gas. It is charged in bulk,” Amberg said. “The problem comes when you have a supplier that is not on the up-and-up and does not record the tax correctly.”
Amberg said a representative of ODOT suggested that the city collect the tax itself since it only has two stations, Creswell 76 and AM/PM. Oakridge collects its own gas taxes, Amberg said, and mentioned it was easy to administer.
The council would have until Aug. 10 to receive input and would have only one more meeting before deciding whether to put it on the ballot.
“You have to do a lot of public outreach or else it has no context on the vote; in this short amount of time it is a heavy lift,” Amberg said. She noted that city staff could not help the council with outreach once the measure has been placed on the ballot.
“We don’t have enough time to engage with Bill in this discussion. I don’t want to work against him … unless we had more time to properly do this, I would rather shelve this,” Prociw said. The other options would be to place the measure on a special election ballot (which costs money), or wait two years before pitching it again.
Not putting the gas tax up for a vote in November will impact street funding, Amberg said. The net revenue collected from the tax would only be used for the construction, reconstruction, improvement, repair, maintenance, and operation of streets within the city, the ordinance states.
“We need to have a complete package of efficient revenue strategies to meet our needs,” Amberg said. “Gas tax, a transportation utility fee, all types of revenue generation are used throughout the cities, but they are not easy to put in place quickly. These things take time.”
Council member Martha McReynolds Jr. said she is “not so moved that it would jar folks coming off I-5. It is compelling to pull money off the interstate; that is a huge asset, and folks will adapt to the cost.” She expanded on the fact a 3-cent increase would not negatively impact most people.
Amberg said the timeline would be compressed for a 2020 vote.
To pursue this tax in November, “we have to have all our answers ready and the city council has to work as a team and see what public outreach looks like,” she said.
“When you put it that way I feel leery,” council president Amy Kndusen said. “I feel like I don’t have enough info to explain to voters why we need a gas tax at this time, even if we have another work session. We need to work harder and longer to get this to pass, and it would be flippant to put it on the November ballot. I don’t want voters to think we are flippant about this.”
“I want to see the gas tax pass but I don’t think we will accomplish this in such a short time,” councilor Alonzo Costilla said. “We need to come up with a campaign and it needs to be done right.”