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<br />funding strategy for transportatiori system needs. Those solutions have not yet come to fruition`''; leading tlie
<br />council to; reconsider.the o tion to let the additional two-cent tax ex ire. '' ` •
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<br />On January 22, 2007, the City Council agreed to the formation of a council subcommittee, ~'com~prised1Coffour `
<br />councilors, to study transportation funding options and to bring back within three months a~!recommendation
<br />for a solution or solutions meeting certain specific criteria:to adequately fund the transportationlisyste ~m. On .
<br />May 29, 2007, the council approved code amendments which would have increased the Business License
<br />Tax on Motor Vehicle Fuel Dealers by three cents per gallon to the eight-cent level and rep~eale~d the sunset
<br />provision on the two=cent fuel tax rate increase enacted in 2005. Subsequently, the council'~~;repealed that
<br />ordinance and submitted the three cent per gallon increase to the voters in November 2007,~', where the~;
<br />measure failed at the ballot. _ Ii 'M
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<br />On January 14, 2007;~the Council held a public hearing for the purpose of gathering community input~ron the
<br />proposed ordinance to repeal the sunset provision on the two-cent per gallon fuel tax rate iricrease. At that
<br />hearing, nine people testified, several of them urging the council to let the two-cent tax increase~expir~e
<br />because of. the negative impact on the sales volumes for local fuel dealers. Draft minutes from that meeting ,
<br />are included as Attacfiment C. Eugene has experienced just under an 8% drop in sales vol ~ume ~`'' '
<br />implementation of the City gas tax in 2003, as reported by the Oregon Department of Transporl
<br />Tax Group. According to ODOT's final report on Oregon's Road User Fee Pilot Program,','con~
<br />March 20U7, "Gas t~-generated revenue is eroding primarily from increases in fuel efficiency,
<br />more roadway usage per vehicle mile traveled.. .." In the ODOT June ' 07 forecast, their cluef f
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<br />identifies gas price and economic activity as the two critical drivers for sales of gasoline, althoL
<br />most dominant factor;in gas consumption statewide is the pace of oyerall economic activity~:''
<br />Representatives of the fuel dealers and the business community also stated ~at that public he
<br />commitment to working towards a more sustainable road-funding solution for cities and co
<br />of a legislated state-wide gas tax increase. In a parallel effort, Eugerie is also working toge
<br />coalition of cities for a higher level of support from the State Highway Trust Fund. , Accorc
<br />however, the reality we face is that the State of ~Oregon has been unable to garner support f
<br />gas tax since 1991: Furthermore, voters rejected the legislature's last attempt to raise the g
<br />Eugene simply cannot continue to passively wait for long=expected relief from either the st~
<br />while the cost to address the city's backlog of needed street repairs grows larger eyery yea
<br />The City Manager-recommended revisions to the Eugene Code with regard to the motor ve
<br />set out in Attachment A. In that proposed ordinance, the sunset date on the two-cent tax in
<br />extended by three years: This would allow time for Eugene to.work together with a coaliti~
<br />counties and business ~partners to achieve legislative funding relief through a state gas tax i
<br />were it,to replace the revenue generation from Eugene's local gas tax, might warrant the cc
<br />the local gas tax altogether. It would also allow Eugene, along with other Lane County citi
<br />struggling under the same burden of street funding needs, to reinitiate conversations with I
<br />a potentia:l county-wide motor vehicle registration fee. In the meantime, the additional twc
<br />will generate nearly $4 million over that three-year period to ensure continuation of a relial
<br />to support ongoing street operations, maintenance, and preservation while efforts continue
<br />state levels to enact new road maintenance revenue mechanisms. For these.reasons, tke Ci
<br />recommends that the council extend by three additional years the ordinance provision whic
<br />otherwise forfeit two cents. of the five-cent city gas tax after February 29, 2008.
<br />~ . F:\CM0~2008 Council A€
<br />~ City Council Agenda page 166 _
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