Gresham Council Rethinking Road Tax Hike

GRESHAM, OR-The Gresham City Council pulled from a September agenda this week a proposal that would have nearly doubled the city’s transportation impact fee. The move occurred after developers and business owners apparently successfully argued that it would hurt the city’s ability to attract development and industry.

The transportation impact fee is a one-time charge assessed to new development based on the number of vehicle trips it generates during peak hours. The goal is to have the fees offset the infrastructure work that must be done to maintain and improve the roads to accommodate the ever increasing traffic load.

The need for the increase, says the city, is that the existing transportation impact fee hasn’t been increased since it was implemented in 1995, and therefore hasn’t kept up with growth. The city says it needs an estimated $45 million in street improvements to handle the estimated 20,000 additional vehicle trips that will join the crowd over the next 20 years.

The couched proposal was to raise the current fee of $1,190 per peak hour trip to $2,284 per peak hour trip. At that rate, a 25,000-sf project in the Southshore Industrial Park would have to pay an $85,000 transportation impact fee, or $2,284 for each of the 37 peak vehicle trips the project would likely generate. A fast-food restaurant would get a discount for often not being the sole reason for a driver’s vehicle trip, but more of a side trip. A business on the transit route would also get a discount. City officials say alternatives to the proposal are being generated and will be brought back to the council later this summer.

In June, the Portland City Council approved a new monthly street maintenance fee that was watered down from its initial appearance in February. The fee, a supplement to systems development fees, is an attempt to fill a $4.9-million hole in the transportation budget created by stagnant gasoline taxes and eternally degrading roads.

Like Gresham’s, the fee was supposed to be based on standard trip generation models for particular types of development. But following complaints from the biggest trip generators–hotels, gas stations, big-box retailers and fast-food chains–a less costly version was approved.

The original fee would have ranged from $398 a month for a 3,890-sf fast-food restaurant to $1,500 a month for the owner of a 500,000-sf office building, generating about $65 million over five years. The revised fees–about half as much for retailers, a 60% discount for hotels and office buildings–will raise an estimated $59.7 million over the same period.