Item 4: Ordinance on Tax on Motor Fuel

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Terry Connolly , 1401 Willamette Street, speaking on behalf of the Eugene Chamber of Commerce, said given the likelihood that the 2 cent gas tax would be referred to voters and then repealed if the council chose to keep it, the decision before the council was whether it would be better off spending the next several months engaged in another debate about a gas tax or using the time to make the case to the public for a bond measure to pay for street repairs. He felt to do so without the gas tax competing with the message to the public would benefit the potential bond measure. He related the Chamber’s recommendation which was to choose the latter course of action. He believed that the energy to be spent on the gas tax would be better served in working with others who were focusing on a comprehensive funding package in the Oregon Legislature to be approved in the 2009 session. He stated that the Eugene Chamber and “virtually every” leading business organization and trade association in the State of Oregon was asking the legislature to approve a package that would provide the funding that was needed for the operation and maintenance of the transportation infrastructure throughout the state, counties, and cities. He understood why the City would not want to part with the $1.7 million that the 2 cent gas tax generated per year. He felt that choosing to let the 2 cent tax sunset for the time being would allow the council and the Budget Committee to identify other sources of existing revenue or a portion of the capital reserves to offset the reduction “at least for a couple of years.” He also thought this would be looked upon favorably by the voters. Ron Tyree , 4000 Spring Boulevard, Ward 2, stated that he operated a local distributorship. He supported the upgrade needed in transportation and fuel taxes as a source of revenue for those repairs. He did not support taxes that were different throughout different jurisdictions. He averred that this caused confusion and an unfair competitive advantages or disadvantages for local gasoline marketers. He said the price discrepancy was also causing people to shift their fuel purchases to other areas. He related that the volume for the area had dropped from 80 million gallons per year to 70 million gallons per year, a 12 percent drop in volume. He attributed this drop solely to the gas tax. He reiterated that there was a consolidated group that was working at the legislative level to improve the state gasoline tax. He believed there was a “real chance” that this could be positive and successful. He declared that Eugene stood to gain $4 million per year if the tax, as proposed, went through. This was equivalent to a 6 cent per gallon tax. He thought a local tax would cause people to oppose any tax at all. He recommended allowing the 2 cent tax to sunset. He said if the statewide effort failed in 2009 he would help support a countywide gas tax. Paul Romain , 707 Southwest Washington Street, #927, representing the Oregon Petroleum Association (OPA), pledged that the OPA would work for a 12 to 14 cent increase in the state gasoline tax to be implemented immediately upon approval of the legislation. He said the part that would go to local government would be negotiated. He stressed the OPA opposition to local gas taxes. He implored the council to not “put [them] in the position of having to put the gas tax on the ballot.” John Anderson , 3340 King Edwards Court, Ward 4, voiced his opposition to the 2 cent gas tax. He felt the public had already voted on whether it wanted a gas tax by reducing the amount of fuel purchased locally. He said while people had not changed their driving habits, they had changed their purchasing habits. He averred that he would be the “first to step up” to help find a more local solution if the legislative session did not result in improved funding. Murphy McHugh , 1848 Russet Drive, echoed the comments of those in support of the sunset clause. He averred that the council had “penalized” him for being a gas station owner in the City of Eugene. He said if he sold gasoline five blocks away from his current location the fuel would be 5 cents cheaper. He related that his business was down and this had resulted in having to lay off people. He pointed out that one large chain store that sold gas would have people backed up eight cars deep just because the gas there was a few cents cheaper per gallon than in other places. He also felt that people in Florence who formerly went to Eugene to shop and purchase gas now stayed home because the gas was cheaper there. He noted