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Volume 11, Issue 8
August 2013


pavingWho pays for paving?
By Virginia Bruce

Ever since automobiles were introduced in the early 20th Century, providing roads has been one of the most valued functions of government. A sensible, efficient, and well-maintained system of roads enables commerce, housing development, and travel for pleasure. Washington County and the Oregon Department of Transportation (ODOT) supervise or provide most of the roads in our area, as well as some major roads in cities.

The money to pay for all that paving comes from a variety of sources, depending on the types of roads and whether we are talking about construction to serve new development, improvements to the existing roads (capital improvements), or maintenance (see chart).

2013 Estimated Amount
State and County Gas Tax For maintenance and operation of Arterials and Collectors $23 million annual
Urban Road Maintenance District (URMD) For maintenance and operation of unincorporated neighborhood and local streets, plus minor safety improvements $3.7 million annual property tax
Major Streets Transportation Improvement Program (MSTIP) To meet existing deficiencies on Arterials, Collectors and other major system improvements as determined by the Board of County Commissioners $35 million annual property tax (enacted 3 times, due to state law changes is now part of the general fund).
Transportation Development Tax (TDT) For future capacity primarily on Arterials, Collectors and other major system improvements. Tax on new development, used for future needs. Varies based on amount of development.
Special District Funding Sources Dedicated funding for specific improvements within, or that directly benefits, the special district. Varies

The primary source of funding for operations and maintenance of the road system is state and county gas taxes. But ever since the Arab Oil crisis in the 1970s, auto makers and consumers have been interested in more fuel-efficient vehicles. This is good for the national economy and the environment, but it puts a squeeze on local jurisdictions that must maintain roads from flat or declining gas tax revenues. A car puts just as much wear and tear on a road if it travels 100 miles on ten gallons or two. And electric cars, which are expected to become much more popular as the technology improves, don’t bring in any gas tax revenues.

The other major source of road maintenance funding is our Urban Road Maintenance District (URMD). This is a line item in property taxes for those of us in the urban unincorporated areas (UUAs) of Washington County, but the $3.7 million per year has to be spent on neighborhood and local streets, plus minor safety improvements, within the UUAs. So it is still the gas tax that pays for the maintenance of major urban roads and rural roads.

Gas tax revenues are not keeping pace with increasing road maintenance needs and material costs. Washington County and its cities have been exploring other funding sources so they can maintain our roads. Currently there is about $10.5 million in needed county road maintenance that has been deferred due to a lack of funding. Deferred maintenance leads to higher eventual costs as roads deteriorate. If funding stays the same (and gas tax revenues for Fiscal Year 2012-13 are were nearly flat compared to 2011-12), by 2021 the deferred maintenance bill will double to about $22 million.

Several strategies were evaluated. Because of both state laws and fiscal constraints, state and local gas tax increases aren’t feasible. Some local cities collect road fees, but the county has no mechanism to collect such a fee (no county utility bills!).

The only viable solution seems to be a county vehicle registration fee that would be added to the state fee. The DMV would collect the fee at the time of registration, whether it’s the four-year fee for a new vehicle, or the renewal fee collected every two years. They would then send the money to the county, which would send the cities their portion (60% to the county, 40% to the cities).

Oregon’s House Bill 2001, also known as the Oregon Jobs and Transportation Act, is the transportation funding plan adopted by the 2009 Legislature. In addition to raising the state gas tax, the bill allows counties to impose a registration fee starting in July 2013. The fee can be no more than $43 per year, which would mean a maximum of $86 per two-year renewal. State law constrains counties and cities to use the fee on roads only. The county could decide to impose any amount up to the maximum.

While nobody really wants to pay more taxes, we have to recognize the futility of trying to maintain our roads with dwindling revenue. Although Metro and all the Portland area counties encourage alternatives to auto travel, we’re not getting out of our cars anytime soon. The cost of paving will rise because of limited supplies of petrochemicals that are used in asphalt, among other reasons.

The real question now is whether the county will put the fee on the ballot. HB 2001 allows counties with a population of more than 350,000 (Multnomah, Washington and Clackamas counties) to levy registration fees without a vote. Putting a measure on the ballot costs between $10,000 and $20,000. It might make sense to save that money for other county purposes, and just go ahead and implement the fee at less than the maximum so we can continue to provide good roads. But county officials will need to weigh the possible reaction to such a move, against the uncertain outcome of such a vote.



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Published monthly by Pioneer Marketing & Design
Publisher/Editor:Virginia Bruce
PO Box 91061
Portland, Oregon 97291
© 2013