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

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Motor Fuel Tax Imposed on Distributors/Dealers There is potential for loss of business for Eugene dealers to dealers selling outside the city Potential limits, where sales are not subject to the tax.However, tax rates as low as 1-3 cents per gallon Economic are not likely to have much affect on consumer behavior or location decisions. One opportunity Impacts for minimizing this concern would be to jointly impose a local motor vehicle fuel tax with the City of Springfield. Demand for vehicle fuel is regarded as inelastic relative to business cycles. This tax would increase the cost of business for consumers of motor vehicle fuel. Gas/ fuel taxes are not deductible as itemized deductions on individual income tax returns but are generally deductible as business expenses or expenses for the production of income. Due to statutory restrictions on the use ofthis tax, there may be limited opportunity for funding Consistency improvements which support mixed-use, pedestrian-friendlynodal development and increased with Council use of alternative modes. However, the motor fuel tax could be structured to address a Goals and significant portion of the funding needs for operations, maintenance and preservation of existing Policies transportation facilities, consistent with the priorities in City financial management goals and draft TransPlan finance policies. On November 1, 1999, the City of Pendleton implemented a 2-cent per gallon tax on all fuel, Other including diesel, sold in Pendleton and used in vehiclesutilizing public roadways. The tax is Jurisdiction applicable to all motor vehicle fuel which is imported or acquired for sale, use or distribution in Experiences the city by both distributors and wholesale/retail suppliers, provided the city tax has not been previously incurred. The tax is scheduled to sunset when the net revenue therefrom reaches the target of $1.2 million, which is the City?s local match share for a major street/underpass construction project. The City estimates that goal will be reached within five years. The motor vehicle tax proposal was brought to the Council by a 16-member citizen committeewhich worked for 18 months, and incurred $9,000 in research and community survey costs, to develop their recommendation to Council. In the assessment of staff, the successof and community support for Pendleton?s tax can be principally attributed to the following factors: direct discussions with and inclusion of wholesale and retail suppliers of gas and diesel C fuel in the process; a specific, well-defined transportation project with strong communitysupport; C a ?sunset? provision for the tax, tied to a specific funding target; C protections for fuel vendors on issues of concern for them (e.g., protections from having C to pay the tax on noncollectible accounts). I11