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Another concern discussed by the subcommittee with regard to relying on a motor vehicle fuel tax as the primary source of locally-controlled transportation funding was the fact that historically, and across the nation, motor fuel taxes have been a slow-growing revenue source that has not proved able to keep up with funding needs. The level of fuel tax revenue generated is subject to fluctuations reflecting changes in consumer consumption patterns as well as newer, more energy-efficient motor vehicle fuel sources which reduce the overall volume of fuel sales. Another consideration in a discussion of relying on the motor vehicle fuel tax as the primary source of locally-controlled revenue for transportation funding is the fact that the revenue objective with respect to this tax (i.e., generating more funding) may conflict with other public policy goals--such as federal, state and local policies and transportation plans aimed at reducing reliance on the automobile by increasing other transportation choices available in the region. Equity with Other Local Jurisdictions - In previous discussions by both the City Council and the Citizen Budget Subcommittee on Transportation System Funding, there was a concern expressed that, as much as possible, a "level playing field" be maintained with other local jurisdictions with regard to the level of Eugene's local fuel tax. At this time, Springfield is not considering additional increases to its local fuel tax, primarily because Springfield is achieving its initial revenue target, which is providing sufficient funding for that city to manage its relatively smaller backlog of pavement preservation projects. Currently, no other local jurisdiction in Oregon is administering a local motor vehicle fuel tax in excess of 3 cents, although nearly a dozen cities and counties have enacted such ordinances. Members of the Budget Subcommittee and the council have expressed concern in the past about the potential for a several-cent difference in Eugene's fuel tax from that imposed by neighboring jurisdictions to both undermine Eugene' s revenue stream due to potential "market flight," and at the same time to create a competitive disadvantage for Eugene fuel retailers and businesses. In those discussions, it was generally acknowledged that a relatively small difference in fuel tax levels (2-to-3 cents) from those in adjoining communities would probably not have much impact on consumer choices around fuel purchases, given the existing differential in retail gas prices at various service stations in the metropolitan area. There has also been discussion at the council level about the possibility of Lane County adopting a county-wide motor vehicle fuel tax to provide transportation system funding for Lane County cities. However, in the most recent discussions of this topic, at a regional transportation summit convened by the Lane County Board of County Commissioners in December 2003, the board chose not to pursue either a county-wide motor vehicle fuel tax or a county-wide motor vehicle registration fee. Proposed Revisions to the Eugene Code Increasing the Level of the Business License Tax - The proposed revisions to the Eugene Code concerning motor vehicle fuel tax are outlined in Attachment A. The first of the proposed revisions would increase the level of the business license tax on motor vehicle fuel dealers by an additional amount, yet to be specified by council. Staff discussions with the City's tax administrator, the ODOT Fuels Tax Group in Salem, suggest that a minimum of 30 to 60 days from the date of adoption would be required for implementation of the increased fuel tax in order to give adequate notice to the dealers and to make appropriate modifications to the reporting forms and instructions. L:\CMO\2005 Council Agendas\M050119\S050119B.doc