Madras residents will have a chance in the May election to vote for a tax on prepared foods and beverages that could generate $1 million to address the city’s deteriorating transportation system.
The Madras City Council this week unanimously approved adding the measure to the May 2020 election. If approved by voters, the measure would put a 5% sales tax on food and beverages at restaurants, cafes and coffee shops in the city.
The city estimates the tax would raise about $990,000 each year, which is nearly three times as much as a gas tax generates.
Jeff Hurd, Madras public works director, said the tax will be better able to meet the city’s funding needs for roads without putting the entire burden on local residents. According to tourism and employment data, 70% of the tax would be collected from visitors.
The city is facing $14 million in deferred maintenance to improve its roadways, Hurd said. Many roads need more regular preventive maintenance and other roads need to be completely replaced, he said.
“We have a lot of existing roads that are beyond the point of repair,” Hurd said.
A transportation advisory committee has been working for the past year to find a solution on transportation funding in the city. The committee considered a gas tax, vehicle registration fee and a general commercial sales tax, but ultimately recommended the prepared food tax.
Over the past few years, other funding options have not been enough for the city, Hurd said.
For example, a state transportation funding package approved in 2017 only provides about $40,000 per year for Madras, Hurd said. The city had to find another way to cover its transportation costs, and that could be accomplished through the prepared food tax, he said.
“To fix our infrastructure, we have to do something,” Hurd said.
“So we are going to do it.”
The transportation advisory committee lists several benefits to the prepared food tax. Specifically, the committee believes the prepared food tax is more sensitive to low income residents because dining at restaurants is more of a choice than a necessity. In addition, the prepared food tax would rise with inflation as food prices increase, where a fuel tax would decrease as cars become more fuel efficient.
Two other cities in Oregon have a prepared food tax. Ashland created its prepared food tax in 1993 and Yachats created its tax in 2008. Both use a 5% sales tax on prepared food and beverages.
“We are basically mirroring what they have done,” Hurd said. “It’s not a new idea by any stretch of the imagination.”
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