The city of Newport is considering raising additional revenue by imposing a gas tax increase and a tax on prepared food. The argument is that these new taxes would tap into our heavy tourist economy, bringing in more outside money to pay for things like infrastructure improvements and maintenance. City officials have said it would be a way of “sharing the burden of funding city services with the visitors to the city.”
The proposal calls for a 5-cent-per-gallon gas tax year round, and a new tax of 5 percent on the sale of prepared food.
While we understand the desire to tap into those visitor dollars, we don’t think this is the way to go. Tourists who visit here a few times a year may not feel the effect all that much, or they might just choose to visit somewhere else on the coast. But people who live and work in Newport will certainly feel the pinch. They buy their gas here throughout the year. They eat at local restaurants.
We believe locals will bear the brunt of these new taxes, which seems contrary to the city’s argument about sharing the burden.
There has been a city gas tax in place for quite a few of years. The rate is 1 cent per gallon during seven off-season months and 3 cents per gallon during the summer. This makes a bit more sense, since it gives a break to Newport residents during those months when there are fewer visitors buying gas here. We can get behind a variable tax like this — at least it provides some relief to locals.
The prepared food tax could very likely serve as a disincentive for many local families — they may decide to just stay home rather than spend the extra money to eat out. While a 5 percent tax may not seem like much money to some people, for those who must count every dollar, it could be the deal breaker. And it will hurt our local businesses that have already suffered a huge hit during the pandemic.
The Newport City Council also recently passed a pretty significant hike in its lodging tax, raising the tax per booked night on short-term rental businesses from 9.5 to 12 percent. While we don’t necessarily agree with such a big jump — it puts Newport’s room tax at the highest in the state* — at least this one does directly target visitors.
The law requires that the gas tax be approved by a vote of the people. And while the tax on prepared food does not require voter approval, the city council nonetheless is opting to put that measure on the ballot as well, and we have to give the council credit for going that route.
At their meeting next Monday, July 19, city council members are scheduled to hear from a North Bend company, Blue Ridge Strategies, that was hired by the city to conduct public outreach on these two tax measures. Plans call for placing the measures on the ballot either this November or in May 2022.
Perhaps we are in the minority in our belief that these proposed new taxes are not in the best interest of local residents. But regardless of your position on this, these are important issues. We encourage you to let your voices be heard, both before the Newport City Council and, ultimately, on the ballot.
*Editor's note: Newport and Warrenton both have transient room tax rates of 12 percent, the highest of any municipality. However, the city of Portland has an effective rate of 13.5 percent, as overnight lodgers pay a 6 percent room tax, 2 percent tourism tax and 5.5 Multnomah County room tax. Lincoln County imposes a room tax, but that is not paid within cities. See the Oregon Department of Revenue for a complete listing.