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Republicans propose 4-cent-higher gas tax Higher fees, savings would pay road costs By PETER WONG SALEM -- Pressed by business interests that want more money for roads, Republican legislative leaders have proposed higher gasoline taxes and vehicle registration fees -- and more savings -- to pay for repairs and construction. The proposal they unveiled Tuesday contains increases of 4 cents a gallon in the state gasoline tax and $10 in the two-year vehicle registration fee, both for just two years. But it relies less on those increases, and more on a variety of savings, to make up about half of a projected billion-dollar gap between needs and income in the next two years. An earlier proposal by Associated Oregon Industries, the state's largest business-lobbying organization, was for a 6-cent increase spread over two years. "You cannot raise taxes high enough or fast enough to cover a $937 million shortfall," said Senate President Brady Adams, R-Grants Pass. "Many people have framed this discussion about transportation based on that assumption. What we are proposing will bring more money to the table than the previous proposal." Adams said one reason for proposing smaller increases was to avert the possibility that potential opponents, such as anti-tax advocate Bill Sizemore, would petition to put them to a statewide vote. Though the tax and fee increases would raise $159 million, the proposal also calls for $338 million more to come from savings. Among them are internal efficiencies in the Oregon Department of Transportation, changes in road-building and other standards, and relaxed environmental and land use requirements. "This is consistent with what I've been saying -- that we should focus on accountability at ODOT before we start talking about any tax packages," said House Speaker Lynn Snodgrass, R-Boring. The Legislature last increased gasoline taxes in 1991. Southern Oregon officials said that they cannot be specific about the local effects of the legislative proposal, given the unspecified nature of many of those savings. "They recognize there is a need, but we have to work through the process," said Joe Strahl, Jackson County director of road and park services. "This sounds preliminary, so it's a little too early to tell how things are going to shake out." Strahl has said some of the region's critical traffic bottlenecks are on state highways, particularly the north and south Medford interchanges on Interstate 5, and Highway 62. "At least there is some movement from the Legislature, instead of a flat no," said Don Walker, Medford's public works director. Walker, who retires at the end of this week, said a gasoline tax increase that lasts only two years would make it difficult for cities to use it to pay off bonds for street projects. Medford had hoped to use a share of increased gasoline taxes to help pay off a first issue of bonds for a multimillion-dollar program of street repairs and improvements. But the 1997 Legislature failed to increase those taxes, so Medford used higher street utility fees and systems development charges. Adams said the proposed two-year limit on the tax and fee increases was to force the 2001 Legislature to review the performance of ODOT and city and county road agencies. Stuart Foster, a Medford lawyer and vice chairman of the Oregon Transportation Commission, said he sees a lot of discussion ahead. "I'm happy that Senator Adams has come forth with this proposal, but I think there is a need for a significant dialogue with all of the stakeholders, including the commission, about the specifics," Foster said. Though the tax and fee increases are backed by business interests, which normally ally themselves with Republicans, legislative leaders will have to attract Democratic votes for any measure. Tax increases require 60 percent majorities for approval, 36 votes in the House and 18 in the Senate. Road plan counts on savings These are highlights of a proposal by Republican legislative leaders to pay for road repairs through savings and tax increases. The assumption is that 77 percent of the 7,500 miles of state highways will remain in fair or better condition, and 30 percent of modernization needs will be taken care of. The gap between projected needs and current income: $937 million. State highways, $139 million; county roads, $528 million; city streets, $270 million. The proposal, which would pay for about half the needs, contains: $200 million in savings from agency reorganizations and changes in environmental and land use requirements. $75 million in savings from changes in road construction and other standards. $63 million in savings from internal efficiencies in the Oregon Department of Transportation. $159 million from a two-year increase in the state gasoline tax, up 4 cents from the current 24 cents per gallon, and the vehicle registration fee, up $10 from the current two-year fee of $30. The increases would start Jan. 1, 2000, and end Jan. 1, 2002. Of the new money, two-thirds would be shared by the state, counties and cities according to the current formula; the remaining third would be split by counties (70 percent) and cities (30 percent). Truck operators would pay a tax on diesel fuel, rather than the current weight-mile tax. ODOT would have to report to the Legislature about highway construction projects and be more specific about how the agency spends money. House Bill 2478, which the House passed last week, is pending in the Senate. Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA