Item C: Strategies for Transportation Funding

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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 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 discussed the 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 option of 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 Summary of Oregon Local Motor Vehicle Fuel Taxes is included in this report as In early polls of members, the TUF and the motor vehicle fuel tax were the Appendix K. only options which received majority support. Parking Tax 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. Carbon-based Fuel Tax While both this and the Parking Tax funding option generated some discussion by the subcommittee, the opinion was expressed that it might be more appropriate for the council to address the feasibility and appropriateness of either a carbon-based fuel tax or the parking tax, rather than for the subcommittee to do so. Proponents for the carbon tax voiced support on the basis that this is one of the few options that most directly targets the users of the transportation system. It was also pointed out, however, that unless the City were willing to apply the carbon- based tax to heating fuels, there would be very little distinction between it and a motor vehicle fuel tax. Ultimately, no direction was given for further analysis of this option. A majority of members felt that the carbon-based fuel tax was not very financially feasible nor politically supportable and indicated by a 5:2 margin that it should not be explored further. The alternative was dropped at that point. Motor Vehicle Excise Tax Vehicle Registration Fees Both of these revenue options generated little interest by the subcommittee. The primary concern