Sisters gas tax upheld in court

Sisters' three-cent gas tax remains valid after the Oregon Court of Appeals found last week that the city had met a deadline to enact the tax in August 2009.

The Sisters City Council passed an ordinance creating the gas tax on August 13, 2009, as a means of generating funds to maintain and improve city streets. This was prior to a statewide moratorium on local gas taxes scheduled to take effect after September 28, 2009.

The Oregon Petroleum Association (OPA) took issue with the ordinance passed in August, immediately circulating a petition on behalf of local gas station owners, and getting the issue on the March 2010 ballot as a referendum.

In the March 2010 ballot Sisters voters approved the gas tax, paving the way for the city to set the payment schedule.

However, OPA maintained that the tax was not valid because it was "enacted" by the vote in March - after the moratorium date for new local gas taxes.

Deschutes County Circuit Court Judge Alta Brady ruled in June 2010 that the tax was valid because it was "enacted" by the council decision and then "approved" by voters and the court of appeals has upheld that position.

In ruling, the court stated that: "...the legislature intended that an ordinance that is subsequently referred to the people by a citizen referendum is enacted when it is adopted by the governing body, here the city council, and not when it is subsequently approved by the people."

However, the law is due for a change.

After the state moratorium expires in 2014, the law will require a vote to enact a new gas tax, reading: "A city, county or other local government may enact or amend any charter provision, ordinance, resolution or other provision taxing fuel for motor vehicles after submitting the proposed tax to the electors of the local government for their approval."

The City collected $135,000 in fiscal year 2010-11. The budget for FY 2011-12 was $140,000 and the city is projecting to collect $138,000. The revenues are used for street maintenance purposes: crack sealing, chip sealing and pavement overlays.