Cities' new tax drives up the cost of filling up.

Byline: Joe Mosley The Register-Guard

Gas prices in Eugene and Springfield are on the rise again today, and this time it's through no fault of oil companies or gasoline dealers.

The two cities, along with Cottage Grove, are implementing 3-cent-per-gallon gasoline taxes - the latest fees that several cities and counties in Oregon are adopting as a means of addressing backlogs of road repairs.

Eugene alone faces a $93 million mountain of street maintenance, and will spend $3.2 million this fall - $2 million of it financed by the new gas tax - on seven repair projects around town.

"I think it's a real good start," city engineer Mark Schoening said Thursday.

"(The gas tax) is part of what was always intended to be a ... collection of funding sources for road maintenance. But we're excited about getting some of the projects built this summer."

Implementation of the new tax comes a week and a half before the Eugene City Council is scheduled to consider delaying a controversial transportation system maintenance fee that was the second half of a street repair funding package adopted early this year.

"This (gas tax) is better than zero," city Public Works Department spokesman Eric Jones said. "But it's not going to bring the problem, in the long term, completely under control.

"The gas tax is inadequate to fully address the problem in Eugene."

The per-gallon tax is expected to be indirectly collected at local gasoline pumps. Gasoline distributors will actually pay the tax to city officials, with the added cost likely to be passed on to service station owners and consumers.

"The gas stations get a ticket (from their distributors) that is an invoice, and there will be a new line on the invoice," Jones said. "Then the retailer will have to pay the distributor the full amount, including the new line.

"We presume they will then walk over to the pumps and roll the price up 3 cents."

Those in the local gasoline industry have been less than thrilled by the prospect of an additional fee on their product - on top of a state gas tax of 24 cents per gallon and a federal tax of 18.4 cents per gallon - but they said consumers will bear most of the new expense.

Distributorships will have some extra costs in calculating and reporting the taxes, but those would be difficult to recoup, said Larry Deckett, president of Metrofueling, the local Pacific Pride distributor.

"The market dictates what you sell it for," Deckett said.

"The state doesn't pay us anything for collecting the tax, either. In most cases, there's an inability to pass anything extra along."

Gasoline prices in Eugene were on the rise even before the local gas tax was added to the pump prices today, according to figures compiled daily by AAA.

Thursday's average Eugene-Springfield price of $1.657 per gallon of regular unleaded gasoline was almost a penny higher than a day earlier, although it was 1 1/2 cents lower than a month ago.

A year ago, the average price per gallon was $1.523 in the Eugene-Springfield area.

At least seven other locally collected gas taxes are in effect around Oregon - in the cities of Woodburn, Tillamook, The Dalles, Sandy and Pendleton, along with Multnomah and Washington counties.

The 3-cent-per-gallon rates that will be charged locally beginning today are permanent, unless ordinances in the three cities are amended.

"It would be the council's role to change that amount," said Jones, the Eugene public works spokesman.

The Eugene council is headed toward discussions this month with officials from Springfield and Lane County on alternative means of generating more street repair revenue to replace the much-criticized transportation system maintenance fee.

There already have been two unsuccessful attempts by citizen groups to gather signatures and force a citywide vote on the maintenance fee, which would be assessed against all residences, businesses and agencies in the city, based on the vehicle trips they generate.

After Eugene Area Chamber of Commerce representatives warned that they were preparing yet another initiative petition, councilors decided to act Aug. 11 on a motion that would set aside the maintenance fee ordinance until July 1.

At the top of the city's list of fee alternatives is a reallocation of Lane County's road fund, which is derived primarily from the state gas tax and federal payments based on past logging activity in the national forests that fall within county borders.