At a Salem City Council work session on Aug. 17, public‑works leaders warned that the city’s reliance on the state gasoline tax is no longer sufficient to keep its streets in good condition. Nearly three‑quarters of the budget for paving, snow removal and routine maintenance comes from that tax, but the revenue stream is flattening while costs continue to rise.
Revenue trends and the impact of fuel‑efficiency
Brian Martin, director of Salem Public Works, explained that the dedicated fund for street upkeep is projected to dip into negative territory by 2029. The primary cause is an increase in fuel‑efficient and electric vehicles, which means drivers are putting less gasoline in their tanks and therefore paying less tax at the pump. “As there are more electric vehicles, people are driving less, they have different means of travel, the amount of tax collected each time someone puts gas in their car has actually become flat,” Martin said. He added that this year may be the first decline in gas‑tax collections in a decade.
Cost pressures beyond the tax
Inflation, higher labor costs and a growing population are adding further strain. According to a staff report, Salem needs roughly $20 million annually for transportation. About 72 % of that—approximately $14 million—is currently covered by the state gasoline tax. The city’s total revenue for road work stands at $16 million, leaving a shortfall that could widen dramatically.
Public Works assistant director of administration Mirla Alvarez‑Navarro said the city’s pavement condition rating sits at the lower end of the “fair” range. To maintain that level, the department would need $28 million, creating an $11 million gap. To achieve a “good” rating, the budget would have to rise to $41 million, leaving a $25 million shortfall.
Possible funding solutions
Because Salem does not have its own gasoline tax, staff floated several options for voters to consider. One idea is a local fuel tax applied to gasoline and diesel sold to passenger vehicles, which would require a ballot measure. Councilor Vanessa Nordyke expressed reservations, citing equity concerns for residents who cannot afford electric vehicles and who rely on personal cars for work.
Other alternatives discussed included a county vehicle‑registration fee shared with municipalities, a street‑utility fee, a sidewalk‑maintenance fee, an urban‑forestry fee, and the issuance of a general‑obligation bond. The council plans to educate the public about the funding gap, conduct surveys and listening sessions, and continue work sessions to refine proposals.
State involvement and next steps
Salem is also awaiting recommendations from a newly formed state workgroup of transportation experts, system users and advocates. The group is tasked with developing a plan that will inform legislative action in the 2027 session of the Oregon Legislature.
In the meantime, council members will weigh the presented options and consider how best to protect the city’s road network without placing undue burden on families who depend on reliable transportation for work and daily life.
Original reporting: Salem Reporter — read the source article.
