Item B: Funding Strategies for Transportation System Operations, Maintenance, and Preservation

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generate voter support for this option, given the competition for other levy-funded needs, such as the Library operating levy. In fact, many of the same concerns were raised around this potential funding option as for a G.O. bond levy. As with the G.O. bond option, doubt was expressed as to whether an LOL fits the criteria as a stable, long-term funding source. Five of six respondents assigned a low likelihood of political feasibility to the LOL alternative. Excise Taxes Business Tax on Fuel Distribution (Outside City Limits) C At the request of the subcommittee, this option was identified for further staff analysis. The main question to be explored was whether or not the City can legally impose a tax on motor vehicle fuel distributors for sales of motor vehicle fuel to customers located outside the legal city limits. Legal counsel?s opinion was that, although the City can tax sales of fuel that occur inside its limits, it cannot tax sales that occur outside its limits. Given that the City?s authority to tax is confined within its territorial boundaries, the subcommittee saw essentially no distinction between this and a local option motor fuel tax, which is discussed in the next section. Local Option Motor Vehicle Fuel Tax C Subcommittee members suggested that a two-to-three cent motor vehicle fuel tax (gas tax) could be a viable second funding source along with a transportation utility fee. It was noted that, if one of the goals is to assess the cost of the system to system users, then an argument in support of the gas tax is that it would be assessed at the point of purchase on those who choose to drive. Members debated whether the revenues from a gas tax could potentially be undermined by market flight. Member Howie Bonnett conducted a survey of local gas prices and found a several-cent difference in retail gasoline prices in a limited geographic section of town-- indicating that a two-to-three cent gas tax would probably not have much impact on consumer choices around gas purchases. Members agreed with this conclusion. On multiple occasions, members discussedthe desirability of coordinating with Springfield with regard to that city?s consideration of and deliberations around a motor vehicle fuel tax. Members noted that the last time the council had considered the optionof a gas tax was in 1995, during discussions related to stormwater funding and associated impacts of the transportation system on stormwater quality. Concern was expressed by the subcommittee that the Legislature might take another run at a statewide gas tax increase. A is included in Summary of Oregon Local Motor Vehicle Fuel Taxes this report as Appendix K. In early polls of members, the TUF and the motor vehicle fuel tax were the only options which received majority support. Parking Tax C While the parking tax was viewed by the subcommittee as having some potential in promoting City land use goals, it was noted that previous attempts by the City to change development choices and driver behavior through parking policy were not successful. It was noted that parking spaces are not as directly tied to the use of the transportation system as would be a transportation utility fee based on trip rates. For example, a manufacturing use may have the same numbers of spaces as a retail use but a much lower trip rate and, therefore, a lower use of the transportation system. The December survey showed that the parking tax alternative was seen as having a low likelihood of being financially feasible and an even lower likelihood of being politically acceptable to the community. In December, members? surveys indicated by a 5:2 margin that the idea should be dropped, and staff was directed to do no further analysis on this revenue option. 20