Gasoline tax increase will backfire.
The Register-Guard's June 10 editorial regarding the Eugene City Council's decision to increase the fuel tax to 8 cents per gallon, effective July 1, missed the point on several issues.
First of all, a fuel tax is an appropriate source of funding to repair and maintain streets. The problem is the attempt to implement it on stations within the city limits of Eugene, but not on stations in nearby cities or in the county, giving those stations a 5-cent to 8-cent per gallon price advantage. This strategy is not fair to local service station and cardlock operators and will not allow the tax revenue or the businesses to be sustainable.
Another point that gets missed in this discussion is that the tax is on all fuel, not just gasoline. Diesel and bio-diesel that are purchased in Eugene are also taxed at the increased rate. Trucking companies that purchase their diesel in Eugene will now be at a greater disadvantage when competing for trucking business.
The station dealers that are leading this petition drive are battling to save their businesses. Several of these stations have documented drops in sales volume of up to 40 percent since the fuel tax was first implemented in 2002. During this same time, stations outside of the city limits have realized huge gains in their volume. The tax increase to 8 cents will magnify that shift even more.
The editorial suggested that the station employees are pawns of dictator owners, being forced to present the petitions to customers. These employees are fighting to save their own jobs by participating in the petition drive. These individuals realize that if this tax increase is not defeated, several stations in Eugene may eventually close and their jobs will be lost.
The newspaper also implied that customers are signing the petition without realizing what they are signing or that it is part of the gasoline purchase transaction. Customers are being made aware of the tax increase, and they overwhelmingly are against it. No one is complaining that they are being asked to sign a petition under false pretenses. To suggest that the general public in Eugene doesn't know the difference between a credit card slip and a referendum petition is ridiculous and insulting.
Many of the business people I come in contact with understand this issue and support the petition drive. You cannot run those businesses out of business that you plan on using to create revenue needed to fix the roads. And that is what will happen if this fuel tax is not defeated.
The Register-Guard suggested that the dealers work for a more equitable countywide tax. I couldn't agree more. The Chamber of Commerce, the Oregon Petroleum Association and I personally all made that recommendation to the City Council on at least three occasions, and we even offered to help facilitate those discussions. I understand the council made no formal effort in that regard before implementing the tax increase.
Our City Council has the responsibility to implement public policy, and it has elected to do so. It also has a responsibility to sustain resources, and this action is not sustainable. Investment in Eugene stations will continue to deteriorate, and capital will not be invested in new stations. The sales volume, which is the tax base, will continue to decline, along with profitability, until the dealer will have no choice but to close the station.
While a few of the councilors understand these realities, it's remarkable to me that the majority do not believe that a 5-cent to 8-cent price discrepancy will cause gas customers to shift from Eugene stations to stations in the county or in nearby cities, jeopardizing the survival of those businesses they intend to use as a source of funding for road maintenance.
It is also just as remarkable to me that The Register-Guard's editorial staff doesn't think these businesses should try to survive by fighting this unfair tax. I for one think they should, and I wish them success.
Ron Tyree is president of Tyree Oil Inc. and Tyco Stations Inc.