Item 2E: Ratification of IGR Actions

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(private pilots) and potentially impact the fixed base operator for the Airport, and in turn potentially impact the Airport. We should be looking for changes that would further increase the proposed tax increase on aircraft fuel, or that would increase the tax above one cent per gallon on fuel usable in aircraft operated by turbine engines (turbo-prop or jet.) This comment specifically addresses only the aircraft fuel aspect of this SB. Brenda Wilson Eric Jones CMO-IGR 1/13/2009 Pri 3 Oppose Comments: My initial analysis is that this bill could create fiscal instability for the City of Eugene and, therefore, should be opposed. The City of Eugene does support reasonable solutions to the transportation funding problems facing Oregon and its communities. The recommendations of the Transportation Vision Committee and Gov. Kulongoski in his proposed jobs and transportation act of 2009 offer a variety of good ideas. To the best of my knowledge, this idea of tying the state fuel tax to a percentage of the average price of motor vehicle fuel is not included in either of those studies. As proposed, LC 1364 could create significant revenue fluctuations from year to year. This, in turn, could cause major public policy problems if state, county and local jurisdictions are unable to plan ahead for OM&P decisions regarding the transportation system – a critical part of Oregon’s infrastructure. (For example, if the average price of gas declined 10% from the previous year, Eugene would receive approximately $600,000 less from the State Highway Trust Fund, with no mechanism in place to offset that loss except to cut services.) The fluctuations could be mitigated through a stability fund; however, significant amounts of money would have to be set aside at the state or local level to create such a fund, and funding for transportation OM&P is already insufficient – where would the $$ come from for a stability fund? Additionally, indexing the gas to increase at the same time that the price of a gallon of gas is increasing could reduce revenues as consumers choose to not purchase fuel because of cost concerns. Recently we have seen that the demand for motor vehicle fuel is no longer inflexible. Also, the price of gas is not something that is set either by the state or by local jurisdictions. In fact, there’s a lot of uncertainty about just exactly how the price of gas is determined from day to day. That uncertainly would become inherent in Oregon’s transportation funding system if this bill were approved. Oregon should not gamble that fuel prices will always increase (shades of the housing market!). Oregon cannot afford to lose road fund revenue. Therefore, LC 1364 should be vigorously opposed in favor of a more stable source of transportation revenue.