City to add 3-cent tax to gas for road fixes.

Byline: Edward Russo The Register-Guard

CORRECTION (ran May 25, 2007): The three-cents-per-gallon hike in Eugene's gas tax, if approved by the Eugene City Council, would likely take effect July 1. An article in Thursday's newspaper had the incorrect date.

Eugene resident Marv Manning filled his Ford pickup truck with gas costing $3.36 a gallon on Wednesday, and he braced for the prospect of paying more next week.

On Wednesday, the Eugene City Council signaled it will raise the city's gas tax next Tuesday by 3 cents a gallon, to 8 cents a gallon, to raise more money for street repairs and maintenance.

Councilors also voted to explore other possible taxes or fees to fund street work, including a property tax levy that would need to be approved by voters, and an assessment on parking spaces at homes and businesses that wouldn't require voter approval.

Manning grudgingly accepted the idea of the 3-cent tax increase, but reserved judgment on the other potential taxes.

"I personally can stand the 3 cents," said the 81-year-old retired firefighter. "I know the roads are in bad shape, but I hate to see taxes going up."

If approved, Eugene's gas tax would be the highest of any of the 12 Oregon cities with a local gas tax, according to the League of Oregon Cities. Springfield's gas tax is 3 cents a gallon.

The Eugene City Council spent 1 1/2 hours debating the merits of raising the gas tax, plus other proposals aimed at raising an additional $16 million annually for street work.

The city has relied on state and local gas taxes and road funds from Lane County to rebuild and maintain its 518-mile street network. But the 24-cents-a-gallon state gas tax has not increased since 1993, and county road funds are ending in July.

With the help of city staff, three councilors - Jennifer Solomon, Chris Pryor and Alan Zelenka - developed four ideas:

A 3-cent gas tax increase.

A 10-year property tax levy assessed on all residential and commercial property in Eugene, with an estimated $87 annual cost to the average home.

A parking space fee on homes and businesses (estimated annual cost to average household: $60 to $66 a year).

A fee on every occupied home and business to raise money for street lighting and bike paths (estimated cost to average household: $18 a year).

A charge imposed on garbage haulers that they would pass along to residents and businesses (estimated cost of $12 a year to the average household).

Zelenka said the proposals are related to the use of city streets by residents and nonresidents alike. For example, gas taxes are paid by everyone who buys gas in Eugene, and the parking assessment would be paid by businesses that draw customers and employees from outside the city.

He said the parking assessment "is not a parking tax. What we are trying to do ... is get people to pay for their use of the streets."

But other councilors didn't like some of the ideas, such as the lighting fee and the proposed garbage surcharge.

The lighting fee would assess property owners in order to free up $850,000 for street work, money that the city now spends each year to light streets and bike paths.

Councilor George Poling objected, saying he's willing to consider raising more money only for "curb-to-curb" street work, not for light streets and bike paths. He also said he wants to keep the gas tax at 5 cents a gallon.

Councilor Betty Taylor didn't like the garbage surcharge because it would cost residents more and could cause illegal garbage dumping.

In a series of votes, councilors endorsed exploring all but the garbage surcharge. Mayor Kitty Piercy broke a 4-4 tie to dump that proposal.

The garbage surcharge was supposed to generate $1 million a year of the $16 million in new revenue, which officials hope will eliminate a growing backlog of street work over 15 years.

With the failure of the garbage surcharge, the council voted to make up that revenue by increasing the proposed property tax levy and the parking fee.

The council's 6-2 vote on the gas tax hike indicates that it will pass when it comes up for final approval on Tuesday.

The city's current gas tax raises $3.4 million a year. The extra 3 cents will produce another $2 million annually.

The other proposals are to be developed over the next several months. They would need approval by the council.

The Eugene Area Chamber of Commerce opposes the gas tax because it will put city gas stations at a disadvantage with stations in other cities, said Terry Connolly, the chamber's government affairs director.

The chamber supports the property tax proposal for streets but is wary about the parking assessment, he said.