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New funding provided by transportation bill will augment local street fee, may eliminate need for local gas tax

The state's $5.3 billion transportation package approved by the Legislature earlier this month is expected to be a major windfall for cities across Oregon and Newberg is no exception.

As the city has been hunting for ways to more sustainably fund maintenance of its 65 miles of streets, the state plan is expected to give Newberg a boost of about $512,000 split over the next two years, according to Newberg Public Works Director Jay Harris.GRAPHIC FILE PHOTO - The state's $5.3 billion transportation package approved by the Legislature earlier this month is expected to be a major windfall for cities across Oregon and Newberg is no exception.

While city officials had been considering whether to ask voters for a new gas tax to help make up the $700,000 annual shortfall in what the city thought it would need per year for streets, Harris now plans to advise the city to hold off even if that would lengthen city road maintenance plans.

"Rather than going for a local gas tax and all of that, my suggestion is to just wait and see and give it a few years and then recalibrate everything again," he said.

The $5.3 billion, 10-year transportation plan from the state —scaled back from an earlier $8 billion plan — covers a wide array of projects and programs, including $22 million for designing Phase II of the Newberg-Dundee bypass.

The plan includes hikes in the gas tax and increases to registration and title fees, as well as new taxes on payroll, new vehicle purchases and bicycles priced more than $200. The package also calls for congestion-priced tolling at some of Portland's bottlenecks.

While this source of funding isn't new, according to Oregon Department of Transportation spokesman Lou Torres, an increase in the gas tax means municipalities' share of it will rise as well.

"The cities and the counties, what they're going to see is a bump up in the amount of revenue that they're getting because the gas tax is increasing as well as the registration fees," Torres said.

That incoming revenue will gradually increase with each legislative biennium over the next 10 years, according to documents provided by both Torres and Harris.

For Newberg, that total is expected to be about $5.6 million in 10 years starting at nearly $512,000 over the next two years, then rising to more than $966,000 for the 2019-2021 cycle all the way to more than $1.5 million for 2025-2027 cycle.

Following a consultant's opinion that Newberg was facing a $1.9 million annual shortfall of what it would need to maintain and repair its aging streets, the City Council approved a new transportation utility fee in May that is expected to fill about $1.2 million of that hole.

While the $512,000 expected for the next two years will decrease the remaining $700,000 annual funding gap down by about $250,000 per year, Harris still expects to advise the council to be patient and watch how the additional funds come in before passing what is expected to be a controversial local gas tax.

He expected to deliver that recommendation to the council in September.

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