Sisters voters to decide on gas tax

Sisters voters will decide in the March 9 election whether to assess a 3-cents-per-gallon gas tax at Sisters gas stations.

The Sisters City Council approved institution of a gas tax last August, but the matter was thrown to Sisters voters after the Oregon Petroleum Association garnered enough support to refer the tax to voters.

The revenue from the tax is designated for street maintenance and repair. The City of Sisters estimates that the street fund will need $140,000 per year in additional funds to properly maintain streets. The street fund has been subsidized for years by transfers from the city's general fund.

The city estimates that the gas tax would cost the average local driver $21 per year. The tax would also tap people who live outside the city limits and visiting tourists to help fund maintenance of the streets they use.

Fuel dealers in Sisters are concerned that a local gas tax will put them at a competitive disadvantage against stations in Bend, where prices are already several cents lower.

Last August, Steve Rodgers, owner of the Mainline Station Chevron at the west end of town, argued against imposition of a tax by the council.

Rodgers said he would be much more comfortable with a vote of the city residents because that would give some indication that they would continue to buy their fuel in Sisters.

Mayor Lon Kellstrom acknowledged that "there's no getting around that it's a tax" during tough economic times. He said that the city really has little choice, other than imposing a street utility fee on city residents that would run around $114 - and he's not sure the city would be willing to do that.

The mayor questions whether the tax will really have a negative impact on business.

"It doesn't appear to me that very many people shop price for gas - particularly tourists," Kellstrom said. "I personally don't think the gallons pumped in Sisters will fluctuate appreciably with a 3-cent-a-gallon tax. I think they (fuel dealers) are hard-pressed to say this is going to cost them business. If, on the other hand, there were gas stations (just) out of town, different story."

According to Kellstrom and city staff, city streets are hitting a critical maintenance point, beyond which costs will escalate. Crack repair and chip sealing early, they argue, saves expensive resurfacing or reconstruction down the road.

For many years, the city has covered its street maintenance costs by transferring money from the city's general fund. The city would continue that practice, but to a lesser degree, if the gas tax is approved. City Manager Eileen Stein says the general fund has more demands on it each year - and it's shrinking.

"The budget for fiscal 2010/11... I suspect that we're going to be trimming," Kellstrom told The Nugget.

Some Sisters area residents have questioned whether the city government has tightened its belt the way people in the private sector have. Sisters has dodged the massive layoffs experienced in other local agencies, such as the City of Bend planning department.

That's largely due to frugal management of revenues generated when Sisters was growing and property taxes were flowing, Kellstrom argues. And Stein says that the city has economized.

"Our employees did not get a cost-of-living adjustment this year... and we're not budgeting for one next year," Stein said. "They're not terribly visible, but there are things we've done to tighten our belts. We just haven't laid off."

Kellstrom said that the city faces many lean years ahead and can't afford to defer maintenance and subsidize the street fund with a dwindling general fund any longer, now that the days of rapid economic growth are past - maybe permanently.

"We're not going to see that kind of growth again," Kellstrom said. "We haven't spent everything we've got, but we're coming up to a point where it's going to happen."

It is not clear what happens if voters approve the gas tax in March. The city believes the tax should take effect immediately, since it would reaffirm the council's August action, which beat a state imposed moratorium on local gas taxes.

The Oregon Petroleum Association has argued that, the election being past the September 2009 deadline, the tax cannot be imposed until the state moratorium ends in four years.

That question may have to be resolved in court.

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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