3-cent gas tax fuel for debate.

Byline: Edward Russo The Register-Guard

Eugene voters on Nov. 6 will decide whether to increase the city's gasoline tax 3 cents per gallon.

The City Council on Wednesday responded to a successful referendum petition drive by Eugene gas station owners and voted to put the 3-cent tax increase on the November ballot.

But on a split vote, the council refused to let voters decide the second proposal in the gas station owners' referendum. That move drew criticism and a promise from the fuel dealers for another referendum petition drive.

Eugene's gas tax is now 5 cents a gallon. The City Council in May approved the 3-cent increase, to 8 cents a gallon, to raise $2 million more annually for street repairs.

Gas station owners, who claim the city's gas tax puts them at a disadvantage with station owners outside the city, wanted residents to decide the fate of the 3-cents-a-gallon tax increase, and to undo a council decision in May to make a previous 2-cents-a-gallon tax increase permanent.

That 2 cents, passed two years ago, was set to end next February. However, city officials want to keep the tax to help the city tackle a growing list of street repairs.

Seven other Lane County cities have local gasoline taxes. Junction City became the latest on Tuesday when its City Council passed a 5-cents-a-gallon tax.

With their referendum, station owners had wanted voters to repeal both May council actions, effectively rolling back the gas tax a nickel per gallon - from its proposed 8 cents to where it was two years ago, 3 cents per gallon.

The council majority's decision to keep the 2-cent portion of the tax off the November ballot led to rebukes and the promise of another referendum from fuel distributor Ron Tyree, one of the organizers of the gas station owners' referendum effort.

"This is political arrogance in action and damages the integrity and credibility of the democratic process in our city," Tyree said.

"Make no mistake, if we need to, the 2 cents will be referred for the taxpayers to vote on," he said.

The City Council is to hold a public hearing Sept. 10 on whether to make the 2-cent portion of the gas tax permanent.

The council's debate featured councilors who thought voters should decide the fate of the proposed 3-cent increase and the previous 2-cent increase, and those who said it was important to make the 2-cent tax permanent.

City Councilor Alan Zelenka said the backlog of street repairs is growing because the city doesn't get enough from state and federal gas taxes, and county road funding has dried up. A city gas tax is one of the fairest ways to finance street repairs because it's paid by motorists, including those from out of town who drive on Eugene streets, he said.

In 2005, Councilor Andrea Ortiz proposed that the 2-cent tax end next February. But on Wednesday, Ortiz said she no longer agrees with that decision because she has become more familiar with the city's road funding problems.

"If we take that 2 cents away, we'll be going backwards," she said.

Other councilors, however, said the station owners' referendum petition drive, which gathered enough signatures to be placed on the ballot, means residents should have a say.

"I don't want to further erode the public's confidence in us by ignoring their request," said Councilor Mike Clark, who made the motion to put the 2 cents before voters.

The council split 4-4 on the motion. Mayor Kitty Piercy broke the tie against Clark's motion, effectively keeping the 2 cents off the ballot. Afterward, Piercy said an "argument could be made that the petition signers did not have the opportunity to address the 2 cents and the 3 cents separately."

The 2-cent increase "seems to have been well accepted" by residents, she said.

"It is certainly my hope that the public will support the 3-cent increase," Piercy said. "We know fixing roads is a high public priority and one that is faced by communities throughout Oregon with no help in sight from the state or county."

After the meeting, Clark said he was "shocked by the arrogance" of his colleagues.

"It's very clear that the people spoke," he said.

The gas station owners "worked within the process" and collected 5,700 verified voter signatures, Clark said. "They ought to be respected," he said.

The 3-cent gas tax increase will be on the Nov. 6 ballot with a city measure on downtown redevelopment and two state proposals, Measure 49, which would restrict rural development allowed under Measure 37, and Measure 50, a cigarette tax increase to provide health insurance for children.

City Recorder Mary Feldman said the cost of a March election with only city measures on the ballot could be as much as $200,000.

Paul Romain, a Portland lobbyist and attorney for the Oregon Petroleum Association who is helping the gas station owners, said the council made a "crazy" decision because a successful referendum will force a March election.

"Instead of having an election for both the 3 cents and the 2 cents for November, it will have an election in March that will cost" the city extra money, Romain said. "It just makes no sense if they are that concerned about money."

INSIDE

Junction City OKs a 5-cent gas tax / E1