Ontario city officials are considering imposing a local gas tax to raise money to cover millions in street projects.
Ontario city councilors made clear at a recent meeting that they intend any such tax boost to be approved by the voters. That likely wouldn’t happen until the primary election in May 2026.
City Manager Dan Cummings mapped out the city’s needs in reports to the council on Monday, March 11.
He said the city estimates it will need $5.5 million for projects to improve traffic safety and flow along Southwest Fourth Avenue, Southwest Second Street and Idaho Avenue. Even if federal funding could be obtained, he reported, the city would need to come up with an estimated $1 million to cover the costs.
The city also needs about $9 million for repairs and maintenance on about four miles of other city streets. The largest chunk – about $5 million – would go to residential streets in northeast Ontario, from Northeast First Street to Northeast Sixth Street.
The idea for a local gas tax emerged as city officials considered where to get more revenue to pay for city operations.
Councilors considered a chart showing estimates of what could be collected through a fuel tax. That ranged from $310,000 a year for a penny-per-gallon tax to $3.1 million if city added a 10-cent tax.
Consumers bought about 30 million gallons of gasoline and diesel in Ontario in 2023, according to the city.
In February, Councilor Ken Hart floated the idea of using a gas tax to not only fund street work but public safety. He said a tax of 6 cents a gallon could replace the city’s $8 monthly utility fee used to pay for police services and still leave an additional $600,000 a year for street work.
He noted such a tax would benefit Ontario residents because the fuel tax would be paid by anyone fueling in Ontario. The utility tax now is applied only to properties within the city.
Hart suggested the gas tax idea be considered by the city Budget Committee, which starts work soon on the new city budget that is effective July 1.
The city could put a gas measure on the November ballot, but City Record Tori Barnett told councilors that would cost about $6,000. She said a measure referred to voters next year would carry no such cost.
That 2026 vote would come too late to provide any revenue for the next city budget cycle. That would mean fresh revenue from an approved gas tax couldn’t be counted on for city costs until the budget that starts in July 2026.
Cities across Oregon impose a gas tax, none higher than 3 cents. Only three cities east of the Cascades assess the tax, including Hood River and Sisters at 3 cents and Hines, which charges a 1-cent fuel tax.
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