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Coalition includes proposal in transportation financing recommended to 2015 Legislature.



Linking future gasoline tax increases with fuel efficiency is endorsed by a coalition of transportation users, local governments and environmental groups.

The proposal is part of a broader financing plan unveiled this week by the Oregon Transportation Forum to lawmakers, who start their 2015 session on Jan. 12.

“This is a modest proposal that starts the discussion about indexing,” says Craig Campbell, the forum president.

The plan emphasizes maintenance of existing roads.

In the 2013 Oregon Values & Beliefs Project survey conducted by DHM Research of Portland for a different coalition of public and nonprofit agencies, 72 percent of those sampled say road and highway maintenance is very or somewhat important — fourth of 20 government services. New roads and highways, on the other hand, ranked 19th.

The plan also proposes infusions of lottery proceeds for nonhighway projects and tax-supported spending on passenger rail and special transportation services for older people and people with disabilities.

The plan proposes no changes in driver licensing or vehicle registration fees.

It acknowledges that the state gasoline tax, which dates back to 1919, is not a long-term solution to transportation financing. It says indexing is an interim solution while Oregon works through alternatives such as a road user fee, which would recoup money from drivers of hybrid and electric vehicles that use little or no fuel.

Under a change that voters approved in 1980, the Oregon Constitution reserves fuel taxes and licensing and registration fees for road and bridge work.

The Oregon Transportation Forum is the successor to the Oregon Highway Users Alliance, which changed its focus after lawmakers passed the most recent funding plan — weighted toward highways — in 2009.

The forum has 40 member organizations, including environmental groups that said too little was done in the 2009 plan for other modes of transportation.

“The likelihood that we would come up with a plan that all of us can agree on was a long shot,” says Campbell, who represents AAA Oregon/Idaho.

“But I am impressed with the people in the room who were willing to think outside the box — and in some instances, outside their comfort zone — and come to this agreement.”

Link to fuel efficiency

According to the forum’s projections, a linkage with fuel efficiency would boost Oregon's tax less than a penny from its current amount of 30 cents per gallon, depending on which measurement is used.

Lawmakers have not advanced previous proposals to link the gasoline tax with some other inflation measure, such as the Consumer Price Index, the price of fuel or the cost of road construction.

Campbell says the latest proposal is intended to be a stopgap measure — and is different.

“It is more of a short-term effort to address the problem of the gas tax being unable to generate the same amount of income year after year as automobiles are becoming more fuel efficient,” he says.

The Legislature in 2009 increased the gasoline tax from 24 cents, where it had been since 1993, to 30 cents in 2011. The increase provided the first new maintenance money for cities and counties in almost two decades.

If the current 30-cent tax were linked to fuel efficiency, the forum projects that it would have risen to 30.3 cents in 2012 under a Federal Highway Administration measurement, or to 30.6 cents in 2013 under a measurement by IHS Global Insight, the worldwide economics firm based in Englewood, Colo.

If the gas tax had been linked to those same measurements since 1993, the forum projects that it would have risen from 24 cents to 33.6 cents in 2012 under the federal data, or to 32 cents in 2013 under IHS Global Insight.

Under other measurements, such as the Consumer Price Index or the cost of highway construction, the forum report says the increases in the gasoline tax would have been steeper.

Fuel efficiency will jump in the next few years. The corporate average fuel economy standards that the federal government sets for passenger cars had been at 27.5 miles per gallon from 1990 until 2010; they will go to 54.5 miles per gallon by the 2025 model year.

Campbell says lawmakers will be asked to apply indexing only to fuel intended for cars and light trucks, not for trucks subject to Oregon’s weight-mile tax, which is based on loads and distances traveled.

Two other potential increases in fuel taxes would apply equally to cars and trucks, as provided for in the Oregon Constitution.

One is an undetermined amount for “modernization and enhancement” projects, at the Legislature’s discretion.

The other is a 1-cent-per-gallon amount for the transfer of some state highway segments that have become urban arterials for cities, or some local roads that have become regional freight corridors for the state.

Other proposals

The Oregon Transportation Forum plan has these other recommendations:

• For a sixth round of Connect Oregon, which pays for transportation improvements other than roads and bridges, $100 million in bonds repaid from Oregon Lottery proceeds. Since 2005, lawmakers have authorized $382 million in such bonds.

Campbell says the funding source is less than ideal: “At some point, we would like a dedicated source of funding for nonhighway uses that would be protected. But finding that source has been difficult.”

• For a continuation of passenger rail service operated by Amtrak and subsidized by the state, $22.6 million in the next two-year budget. This amount is in addition to the $10 million already drawn from customized license plates and fuel taxes for nonroad equipment, such as lawn mowers.

Campbell says elimination of federal funds from Amtrak requires the additional money: “We cannot assume they will come back, so we are taking steps to make sure we are addressing these funds.”

• For additional state aid to special transportation services to older passengers and people with disabilities, $75 million in the next two-year budget. This amount is in addition to about $20 million already drawn from the tax-supported general fund, plus earmarked tobacco taxes.

“This would provide for a much larger state share in these programs,” Campbell says. These services are usually operated by transit districts or contracted through social service agencies.

• For transit passes for youths not served by school-bus systems, $20 million in the next two-year budget.

• The plan also proposes a 10-year assessment of needs of all transportation modes, not just highways. The Oregon Department of Transportation has four-year transportation improvement plans, but Campbell says a broader look is needed.

“When we’ve gone to the Legislature and said the transportation system needs money, somebody comes up with a huge number that does not reflect the reality of what we can spend money on,” Campbell says.

“What this effort tries to capture is state and local transportation needs not tied to roads — that in the next 10 years, we would spend an amount on those specific projects that need to be done.”

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