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Five-year road plan better.

Byline: The Register-Guard

The Eugene City Council is united in its commitment to placing on the November ballot a property tax measure to pay for the road repairs that citizens say they want. Members are divided on whether to propose a 10-year road work funding program, or a five-year plan. The council needs to bear in mind that the voters may not be in a mood to approve any sort of tax increase. The proposal will have to be crafted for maximum political appeal, an imperative that favors the shorter-lived measure.

Both options would increase property taxes by 59 cents per $1,000 of assessed value, or $118 a year for the owner of a $200,000 house. The 10-year measure would raise a total of $81.1 million; the five-year proposal would raise $35.9 million.

Those are big numbers. But the five-year measure costs only 44 percent as much as the longer one, even though the tax rates are identical. That's because it's assumed that the cost of labor, equipment and materials will rise by 4.5 percent a year, so the amount needed to pay for a road repair program would rise from $6.5 million in the first year to $7.6 million in the fifth year and $9.7 million in the 10th year.

By lopping off the five years in which inflation is the greatest factor, a five-year measure gains the advantage of looking 56 percent less expensive. That reduces the risk that voters will suffer sticker shock at the polls.

Voters also understand that a 10-year inflation projection is more than twice as unreliable as a five-year projection. Inflation over the next 10 years could be 4.5 percent, but will probably be either higher or lower, and the effect of the difference will be compounded over time. In the later years of a 10-year road funding plan, Eugene would be likely to have more money than it expected or less money than it needs. It's hard to see even five years ahead, but at least the effects of miscalculations have less time to feed on themselves.

With a smaller price tag based on firmer estimates of the future cost of road work, a five-year measure would be easier to sell to voters. But that's assuming voters are willing to buy any sort of proposal forwarded by the council.

There's not much evidence for that assumption. When the council raised the gas tax for road repair last year, the voters rescinded the increase by a ratio of 56 percent to 44 percent. More than a simple unwillingness to pay was at work, though that is a factor in every election involving taxes. Many voters also doubt that the city would use new road-repair money wisely or as promised.

That gives another advantage to a five-year measure. Voters know that it will take many years to reduce Eugene's $170 million-plus backlog of road repairs. A five-year funding plan would almost certainly need to be renewed. By the time the city returned to the ballot for round two, voters would have had a chance to evaluate the road repair program and decide whether they're getting their money's worth. Voters are more likely to trust the city with the funds from a tax increase if they can look into the middle distance and see a chance to hold the city accountable.

A 10-year measure, in contrast, would provide no opportunity to renew the road repair program or shut it down until the end of the next decade.

The near-permanence of a 10-year measure would bind the city as well as the voters. Coming years are likely to see transformations in the field of transportation. The state may at last provide increased resources to municipal and county governments. Rising fuel prices are certain to affect the transportation system in a variety of ways. The city's priorities are always shifting. A five-year program would allow the city to adapt its road repair program to these and other changes far more easily than could be done under a 10-year commitment.

More than half of the cost and more than half of the uncertainty lie in the second half of a 10-year road repair program. Councilor Bonny Bettman was on target in proposing that the program be cut to five years, and that only the least expensive, more predictable half be taken to the voters. In five years' time, having won the voters' confidence that road repairs would be made as promised and after making any necessary adjustments, the city could seek voter approval of a second five-year program.

In this case, good politics and sensible planning amount to the same thing.
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Title Annotation:Editorials; Eugene could begin street repairs, build credibility
Publication:The Register-Guard (Eugene, OR)
Article Type:Editorial
Date:Jul 20, 2008
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