Newport Asks Voters For 5-Cent Year Round Gas Tax

The Newport city council approved an ordinance to place a year round 5-cents per gallon gas tax on the May ballot to be approved by voters. It was explained during the hearing that the costs to repair and maintain city streets are increasing. The current gas tax structure was put in place in 2009. City manager Spencer Nebel pointed out that over the course of the 15-years the costs of asphalt and materials for roads has increased. He added this also is an important step to help share the cost burden of fixing the streets with not only citizens but with tourists who come and use our roads as well. The tax will address street resurfacing and reconstruction needs.

The Newport City Council established a Finance Work Group to develop a system for projecting the city’s long-range financial condition. In addition, the Work Group reviewed estimates of future funding needed to properly maintain, replace, and construct streets and roadways in the City of Newport. The city has a significant gap in meeting the estimated cost of the maintenance, replacement, and construction of streets and roadways. The city has two primary sources of funding for street improvements, including the current local motor vehicle fuel tax of a variable one/three cents per gallon, from which the city recognizes about $197,000 annually in taxes for the city’s street resurfacing program.

In addition, the city receives State Shared Revenues and transportation enhancement funds from the State of Oregon. Based on an analysis conducted on the current level of reinvestment in the street system, the city’s street overall index would fall to poor by 2030. In order to maintain a condition index of at least fair to good, the city needs to invest $2 million per year in the street system. The increase in the motor vehicle fuel tax will be part of the investment needed to meet this target. The targeted investment of $2 million would provide the ability for the city to keep up with the capital needs of its streets.

The tax on motor vehicle fuel shares the burden of street improvements with residents and non-residents who utilize the city’s street system. The Finance Work Group report recommended that the City Council consider implementing a year-round five cents per gallon motor vehicle fuel tax. A five-cents per gallon tax would generate approximately an additional $311,000 per year that would be dedicated to street resurfacing and reconstruction projects. The council approved the motion and Newport residents will see the measure on their ballots for the May 21st election.