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Kalispell council lukewarm on gas-tax proposal

| August 21, 2007 1:00 AM

By JOHN STANG

The Daily Inter Lake

As a whole, Kalispell's City Council's first feelings toward a proposed Flathead County gas tax were lukewarm.

However, only council member Bob Hafferman specifically opposed the idea of a gas tax at a council workshop session Monday.

The rest of the council supported the idea with reservations, or did not strongly oppose the concept.

"It sounds like the general consensus of the council is that this is something to look at," Mayor Pam Kennedy said.

The Flathead County commissioners are floating a proposal to the Kalispell, Whitefish and Columbia Falls city councils to call for a November referendum on whether the county should levy a gasoline tax - likely 2 cents a gallon - to pay for repair work on rural and city roads.

No votes legally are allowed at a workshop session. So Kalispell's council plans to address the matter formally in September.

Montana allows counties to levy local gasoline taxes of as much as 2 cents a gallon - if voters approve such a measure.

For political reasons, the four Flathead governments want a united front if this proposal goes to a referendum.

Elected officials from the four governments discussed the idea in January during a joint meeting.

The GAS-TAX proposal is prompted by Congress allowing the Rural Schools and Community Act of 2000 to expire this year after a seven-year extension. That federal law provided counties and schools - which had lost much of their taxable bases because of national forests in their jurisdictions - to receive 25 percent of the revenue from those forests.

As federal timber revenue began to drop significantly during the 1990s, so did the revenue to local schools and counties.

That means the last federal payment to Flathead County - roughly $1.5 million - will be applied to the 2007 budgets of the county and its schools.

Of that $1.5 million, about $900,000 goes to Flathead County's $4.865 million annual road budget, providing 18.5 percent of that total. The proposed gas tax would make up a portion of the predicted $900,000 shortfall expected for 2008.

No dollar figure has been calculated for what a 2-cent-per-gallon Flathead County gas tax would raise. City Manager Jim Patrick guessed Monday that the revenue could be roughly $1 million, to be spread across Flathead County, Kalispell, Whitefish and Columbia Falls.

Howard Bray, who owns the White Oak Mart near Somers, told the council that gas-station owners make about 10 cents profit on every gallon sold, and that a 2-cent gas tax would cut into an already slim profit margin.

Pete Wesel of Kalispell pointed to the city's slow progress on creating impact fees to pay for road work caused by increased traffic - saying those fees would address many of the needs a gas tax would tackle.

Hafferman opposed a local gas tax, saying the city should approach state and federal government to deal with federal forest revenues that are now lost to cities and counties.

Council member Kari Gabriel supported taking a gas tax to a public ballot as long as it would not hurt individual gas-station owners. Patrick said a county gas tax would not affect a gas station's profit margin. Council member Hank Olson said a county-wide gas tax would level the playing field among Flathead stations.

Gabriel wanted feedback from some type of gas-station owners' organization on a tax's effects on profit margins.

The rest of the council supported taking the matter to a November ballot as long as other roadwork revenue options were explored.

Some council members said a local gas tax would result in tourists paying for using Flathead County's roads.

Reporter John Stang may be reached at 758-4429 or by e-mail at jstang@dailyinterlake.com