Gas tax or car tab fee? Ferndale struggles to fund road fixes

THE BELLINGHAM HERALDMay 31, 2013 

FERNDALE - The City Council is likely to rescind a ballot measure that would ask voters to approve a penny-per-gallon gas tax in the city limits. Even so, city officials are continuing a debate that has persisted for years over how to raise revenue for road repairs.

When the council convenes Monday, June 3, it will reconsider its May 6 vote to put the fuel tax on the Nov. 6 ballot.

That vote was 4-3, and two who favored the measure appear ready to change their votes.

Council will meet at 6 p.m. at 5694 Second Ave.

Council member Paul Ingram, who initially voted for the ballot measure, said Wednesday, May 29, in the Finance and Administration Committee meeting that the measure shouldn't be considered for the November ballot until after the state Legislature decides whether to impose a 10-cent-per-gallon tax.

Adding to the tax burden of fuel purchasers is only part of his concern, Ingram said in a Thursday interview.

"I have some personal issues with a tax that seems to target a specific small-business industry. I wouldn't mind it if we were going after Pilot or after a big Walmart gas station," Ingram said. Pilot Flying J, based in Knoxville, Tenn., has a gas station at 1678 Main St. Its volume of fuel sales enables the company to sell gas more cheaply than the eight independent station owners in Ferndale.

The gas tax would be more acceptable to some opponents on the council, including Jon Mutchler, if it included an exemption that amounted to a tax loophole for the small-station owners.

Pilot Flying J, through its public relations firm Moxley Carmichael, declined to comment on a gas tax in Ferndale that would single out its station.

Two weeks after his May 6 vote in support of the ballot measure, council member Lloyd Zimmerman said he, too, was having second thoughts about a tax that applied only to a small number of business owners. Independent station owners speaking to the council in May said fuel sales were too competitive to allow them to pass the one-cent increase to customers.

Though the gas tax measure might be pulled on Monday, council members continue to weigh ideas for increasing revenue for road repairs. Forty percent of the city's road miles need to be rebuilt, according to a 2010 street survey. Total cost of street repairs through 2020 is estimated to be $9.6 million.

"We are desperate for (road money)," Ingram said.

At Wednesday's committee meeting, Ingram revived a proposal to increase the car-tab fee in the city by $12 - an idea rejected by council as recently as December 2011.

By one conservative estimate, the car tab fee would give the city another $96,000 annually for road fixes. This would be in addition to about $340,000 a year from a sales tax hike approved by voters in February 2012.

"It's something that could stand to be talked about again," Ingram said of the car tabs. "I know this is hard to believe - I've had people tell me they would rather pay the tab than another increase in the gas cost."

Council member Cathy Watson continues to support a gas tax ballot measure and is strongly opposed to a car-tab fee. She is skeptical about station owners' claim that they will need to absorb the penny increase.

She said the only reason council would consider a car tab over a gas tax is "because we're friends with the gas station owners and not the other 12,000 people" who live in the city and would pay the car-tab fee.

"It's true. People with money get what they want," Watson said.

Reach Ralph Schwartz at 360-715-2289 or ralph.schwartz@bellinghamherald.com. Read his Politics blog at blogs.bellinghamherald.com/politics or follow him on Twitter at @bhamheraldpolitics.

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