Gas tax proposal draws fire from dealers

The proposal for a local gas tax of three cents per gallon to be imposed upon dealers in Sisters drew fire from gas station owners and local citizens at a public hearing at City Hall Tuesday, July 28.

The proposed tax would be used to fund street maintenance, which has for years been subsidized by the city's general fund.

The city council hit upon the gas tax as the most equitable way of funding maintenance on Sisters' 42 miles of streets.

"A gas tax spreads out the cost responsibly to everyone who uses the city streets," said City Manager Eileen Stein.

Opponents don't see it that way.

"What I don't understand ... is how you can make five businesses pay for the (streets)," said local businessman Chuck Hoyt.

Hoyt and Sisters gas station owners expressed their concern that the tax would add to prices that are already higher than those in Bend and Redmond and make Sisters' stations uncompetitive.

"When we opened the Pumphouse, we got competitive with Bend and Redmond and we started selling gas in this town," said Tom McMeekin, who sold the gas station, but still owns the Pacific Pride card-lock service on the site with his wife, Helen.

"If we raise the price, they go away."

According to a staff analysis, the public works department says the city needs to spend about $140,000 per year on street maintenance - an increase of about $50,000 over current levels.

City Manager Eileen Stein noted that the city stands to gain $38,000 from a statewide gas tax when and if it is implemented in three years, but that is not enough to fully fund street maintenance.

Fund transfers would continue to subsidize part of the street fund even after the local tax is implemented.

Mayor Lon Kellstrom said that the council looked into other ways to fund street maintenance, including a surcharge on utility bills. A surcharge would only affect residents and property owners inside the Sisters city limits. Councilors felt that such a tax is unfairly burdensome on a few people.

They estimate that the average local driver will pay $21 per year in gas tax while a utility surcharge would cost each account in Sisters $114 per year.

To repeated assertions that "there has to be a better way," Kellstrom said, "I wish we could find it."

Opponents pressed councilors for their individual opinions on the tax. Kellstrom believes it is the only way to handle the long-term maintenance needs on city streets.

"I didn't run for city council to kick the maintenance can down the road," he said.

Councilor Sharlene Weed believes a gas tax will be necessary, but she opposes imposing it now because of the difficult economic situation facing businesses and residents in the Sisters Country.

Councilor Bill Merrill favors the tax and expressed doubt that an extra 3 cents per gallon would drive a significant proportion of drivers to Bend or Redmond to fill up. He also argued that a utility bill surcharge "would be grossly unfair."

Councilor Gerry Bogart said he is undecided, but cautioned that deferred maintenance on roads will cause costs to skyrocket.

"Then we're really going to see some pain," he said.

Councilor Pat Thompson, who said he remains undecided on how to vote on the issue, acknowledged that "it's a tough deal; it's an unpopular deal. Nobody likes it."

He said that public input on the issue is "very important."

He noted that, as the owner of Sisters Rental, he would bear a burden under the proposal.

"Everything I run has fuel in it," he said. "Who's going to pay for it? That's me."

Sisters area resident Greg Booth questioned the entire principle behind the move for a new tax.

"Government grows and becomes a parasite in time, not a tool for society," he said. "Can this council say, before it initiates another tax, that it has reduced its budget along with the GDP (Gross Domestic Product)?"

Kellstrom responded that the city's "business" has not fallen off the way the local economy has: the city still must provide sewer, water, parks and street maintenance.

The city is trying to act swiftly on the tax - and that fact in itself bothers some opponents.

"Nothing sounds worse to me than when a public official says 'we've gotta act now,'" Booth said.

The State of Oregon has placed a four-year moratorium on local gas taxes, which takes effect on September 28. The city council must decide to impose a tax before that deadline or wait four years before bringing up the issue again. The decision does not require a vote of local residents (see "Why no vote on gas tax?," this page).

Steve Rodgers, owner of Mainline Station, at the west end of Sisters, would much prefer to see the matter decided four years from now, by a vote of the people.

"I'd feel better if we waited the four years and put it to a vote," he said. "If the people want it, I'll go with it. But if the five councilors vote it in, I don't think I'm going to be able to go with that."

The ordinance imposing the tax is expected to come up for a vote at the city council meeting on Thursday, August 13.

Author Bio

Jim Cornelius, Editor in Chief

Jim Cornelius is editor in chief of The Nugget and author of “Warriors of the Wildlands: True Tales of the Frontier Partisans.” A history buff, he explores frontier history across three centuries and several continents on his podcast, The Frontier Partisans. For more information visit www.frontierpartisans.com.

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