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Another concern discussed by the subcommittee with regard to relying on a motor vehicle fuel tax as the <br />primary source of locally-controlled transportation funding was the fact that historically, and across the <br />nation, motor fuel taxes have been a slow-growing revenue source that has not proved able to keep up <br />with funding needs. The level of fuel tax revenue generated is subject to fluctuations reflecting changes <br />in consumer consumption patterns as well as newer, more energy-efficient motor vehicle fuel sources <br />which reduce the overall volume of fuel sales. <br /> <br />Another consideration in a discussion of relying on the motor vehicle fuel tax as the primary source of <br />locally-controlled revenue for transportation funding is the fact that the City's revenue objective with <br />respect to this tax (i.e., generating more funding) may conflict with other public policy goals--such as <br />federal, state and local policies and transportation plans aimed at reducing reliance on the automobile by <br />increasing other transportation choices available in the region. <br /> <br />Equity with Other Local Jurisdictions - In previous discussions by both the City Council and the Citizen <br />Budget Subcommittee on Transportation System Funding, there was a concern expressed that, as much <br />as possible, a "level playing field" be maintained with other local jurisdictions with regard to the level of <br />the local fuel tax. At this time, Springfield is not considering additional increases to its local fuel tax, <br />primarily because Springfield is achieving its initial revenue target, which is providing sufficient <br />funding for that city to manage its relatively smaller backlog of pavement preservation projects. <br />Currently, no other local jurisdiction in Oregon is administering a local motor vehicle fuel tax in excess <br />of 3 cents, although nearly a dozen cities and counties have enacted such ordinances. <br /> <br />Members of the Budget Subcommittee and the council have expressed concern in the past about the <br />potential for a several-cent difference in Eugene's fuel tax from that imposed by neighboring <br />jurisdictions to both undermine Eugene' s revenue stream due to potential "market flight," and at the <br />same time to also create a competitive disadvantage for Eugene fuel retailers and businesses. In those <br />discussions, it was generally acknowledged that a relatively small difference in fuel tax levels (2-to-3 <br />cents) would probably not have much impact on consumer choices around fuel purchases, given the <br />existing differential in retail gas prices at various service stations in the metropolitan area. <br /> <br />There has also been discussion at the council level about the possibility of Lane County adopting a <br />county-wide motor vehicle fuel tax to provide transportation system funding for Lane County cities. A <br />county-wide fuel tax would eliminate the issue of inequities in the level of fuel taxes among local <br />jurisdictions and would also provide a locally-controlled revenue source for Lane County municipalities <br />which are struggling to find ways to address this high-priority funding need. However, in the most <br />recent discussions of this topic, at a regional transportation summit convened by the Lane County Board <br />of County Commissioners in December 2003, the board chose not to pursue exploration at this time for <br />either a county-wide motor vehicle fuel tax or a county-wide motor vehicle registration fee. <br /> <br />Proposed Revisions to the Eugene Code <br />The proposed revisions to the Eugene Code concerning motor vehicle fuel tax are outlined in <br />Attachment A. The first of the proposed revisions would increase the level of the business license tax <br />on motor vehicle fuel dealers by an additional amount yet to be specified by council. Staff's discussions <br />with the Fuels Tax Group in Salem suggest that a minimum of 30 to 60 days from the date of adoption <br />would be required for implementation of the increased fuel tax in order to give adequate notice to the <br />dealers and to make appropriate modifications to the reporting forms and instructions. <br /> <br /> L:\CMO\2004 Council Agendas\M041122\S0411225.doc <br /> <br /> <br />