City Streets: Investing in a Neglected Asset

A key pillar of the state's economy, Oregon's road system, is deteriorating. All Oregonians rely on the state's roads -- to get children to school, to commute to work, to shop, to have the goods we need delivered and our garbage picked up. The efficient movement of people and goods depends on a well maintained road system.

Lacking proper maintenance and timely repairs, paved roadways will fail and require extremely costly reconstruction. Estimates of the cost of street reconstruction range from six to 10 times the cost of regular maintenance. With current resources, cities cannot meet the expense of adequately maintaining the 20,000 lane-miles of local roads. The League of Cities estimate that cities would need more than $160 million in additional annual revenues to properly maintain and preserve Oregonís municipal road system. Without a significant new investment in city road maintenance, this vital infrastructure asset will continue to deteriorate and create enormous future repair costs.

For most cities, the state highway fund is the primary source of maintenance revenues. Since there has been no increase in the state gas tax rate since 1993, the effects of inflation have decreased the purchasing power of highway fund dollars, particularly in construction-related costs, which have increased by more than 70 percent during the same period. Construction material costs rose by 10 percent in 2006 alone. In addition, increasing auto fuel efficiency has reduced the revenues per mile raised by the gas tax, even as road wear increases with greater miles traveled per gallon. Despite significant efforts on the local level to identify new funds for street maintenance, cities are facing the threat of deteriorating road conditions, which in turn threatens the economic vitality of local communities and the State of Oregon.

This report provides an overview of the:

  • Important role city streets play as a foundation for economic development;
  • Approaches cities have taken to maintain and protect this valuable infrastructure asset; and
  • Gaps in funding that exist between available street fund resources and the revenues cities required to properly maintain and preserve the local road system.

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