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Report reignites talk of bike excise tax – but advocates aren’t howling

Posted by on May 29th, 2013 at 4:44 pm

North Portland Bikeworks new location-11-10

Would you like tax with that? Maybe you would, actually.
(Photo © J. Maus/BikePortland)

Today’s Portland City Club report that gave a big bear hug to biking also said buyers of new bikes should pay a special tax: 4 percent on each new bike purchase in Oregon, or $20 for a $500 bike.

The report recommended that the money — it’d be about $840,000 annually for the State of Oregon — go to programs that support and educate road users about bikes.

The city’s bicycle advocates aren’t exactly thrilled. But perhaps surprisingly, they aren’t gasping in horror, either.

“Generally speaking, the BTA is opposed to any new barrier between people and biking,” Bicycle Transportation Alliance advocacy director Gerik Kransky said today. “That being said, we’re open to the conversation. … It looks like their ideas about how to spend the money are pointed in the right direction.”

As close watchers of the local bike scene know, this nuance about a dedicated bike tax is nothing new. Back in 2010, we shared that bike-loving U.S. Rep. Earl Bluemenauer and Portland Bike Coordinator Roger Geller were both open to the concept, as was the BTA. Two years before that, we took a look at the Colorado Springs bike tax, which charges $4 for each adult-size bike and is quite popular in that bike-friendly city.

“$20 on a $500 bike is really not asking a lot to fund programs, like Safe Routes to School, that we feel are important.”
— Henry Leineweber, lead writer of City Club report

I asked Henry Leineweber, lead writer for the City Club’s thoughtful report, why the committee settled on recommending an excise tax.

“It was in our charge as a committee to look at and make funding recommendations,” said Leineweber, whose day job is covering the recycling industry as a journalist. “It would be irresponsible of us to say, ‘All these things are great, and someone else should pay for it.'”

Bike infrastructure, of course, saves taxpayers lots of money by reducing the need to expand auto infrastructure. But the $830,000 or so raised by this tax wouldn’t be enough to pay for much infrastructure anyway.

Instead, the City Club committee recommended that it go to bike education programs which currently depend on Congressional support.

“$20 on a $500 bike is really not asking a lot to fund programs, like Safe Routes to School, that we feel are important and need a dedicated source of funding that are not subject to political whims at the national level,” Leineweber said.

Kransky, the BTA’s advocate, said that his organization (which is partly funded by Safe Routes to School) might again endorse such a tax as long as it were part of a general conversation about smarter transportation funding — the sort that might charge everyone for the road, but would charge more for trips that cause either congestion or road damage.

“If you’re talking about raising money through a bike excise tax, then let’s have a full conversation about what a new transportation utility model would look like,” Kransky said. “What about a street maintenance fee? There’s lots of ideas out there.”

Phillip Ross, founder of Portland-based cargo bike builder Metrofiets, said Wednesday that although in general he’s happy to pay taxes, he worries that an Oregon tax on bikes would drive more people to order their bikes online from manufacturers abroad.

“There are so many hurdles in being cost-competitive in a market that is dominated by foreign manufacturers coming in,” Ross said. “At the end of the day, it’s still way cheaper to just get your bikes from China. … It’s not hurting our business that much, because we’re still able to be cost-competitive, albeit on the higher end, [but] people are price-conscious enough that that sort of thing can make a difference.”

Jesse Fairbank

River City Bicycles floor manager Jesse
Fairbank said a bike excise tax for education
would have both ups and downs.

Jesse Fairbank, floor manager at River City Bicycles, said he’d have mixed feelings about the proposal.

“Most of our customers who walk through the door, very very few of them are relying solely on a bicycle,” he said. “They’re paying money through other avenues. … Yet another tax on road users who aren’t putting wear and tear on the system is kind of a tough pill to swallow.”

But he said River City Bicycles, which is Portland’s largest single retail shop, strongly supports education and advocacy, too:

“If cycling can be improved in terms of the safety of it, if there’s better education, if people are more aware of other road users, if there’s more people out doing it — that’s more people coming in buying bikes.”

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METROFIETS
Guest

What do folks think about this? My first impression – I would like to see a provision for domestically manufactured (USA BUILT) bikes exempted from this tax. Go figure – 😉

younggods
Guest
younggods

I have a better idea… 4 percent on all new car purchases go to this program.

El Biciclero
Guest
El Biciclero

$20 on a $500 bike is the difference between a stock rear reflector and a decent tail light–or even an OK headlight. For the fiscally challenged, this could be seen as a safety hit.

Yuri Nashun
Guest
Yuri Nashun

Yes stick it to the users who have the least impact on our roads, air quality, and safety… Makes perfect sense.

Allan L
Guest
Allan L

What is the geographic scope of this tax? If it is local, can it be avoided by going elsewhere or buying on line? Is that fair to local retailers? What is the mechanism for enforcement and collection? How much will that cost in a state with no sales tax? The last thing we need is another dumb, hastily designed, and fundamentally flawed tax.

maxadders
Guest
maxadders

Sounds like a great way to convince people to order bikes off the internet. Another win for companies like BikesDirect, another blow to local bike business. What a shame.

dwainedibbly
Guest
dwainedibbly

It’s a poorly thought out proposal that sounds good from a couple of superficial angles. It’s very much anti-small-business. I expected better from the City Club.

Craig Beebe
Guest
Craig Beebe

Hi and thanks for the balanced report, Michael. I was on the research committee that produced this report, one of 12 volunteers who spent a whole year trying to get at every angle of bicycling and its role in a multimodal 21st-century city. I am also a person who rides almost every day to work, and often for recreation or errands too.

I just want to remind folks here that this is one of many recommendations in the report, and one of several funding recommendations. Not that I think Michael unfairly gives the impression otherwise, but I urge you to read the full report before you come to a final conclusion about it and its implications for cycling and transportation generally in the city and state.

I also want to remind you that City Club membership is fully open to anyone. It is a 501(c)(3) and your membership helps inform important conversations like this one. You also get a chance to vote on reports like this one. I know the membership is expensive for many–it is a big chunk from my own non-profit salary–but to me the opportunity to help shape this city we love is very much worth it. You can learn more here. http://pdxcityclub.org/join

I also want to invite you to attend this week’s Friday Forum, for which bicycling will be the key topic, and our free public town hall next Wednesday evening. And if you are a member, or you become one before June 7, I hope you’ll vote on the report! Details on all the events and RSVP info are here. http://pdxcityclub.org/

Thank you for your passion and your thoughts on the report.

Craig

Chris Anderson
Guest

The program they mention funding in the report with the tax is bike counters for the bridges and other bike routes. Until we get a bike share system where we can really track how people are riding around town anything we can do to measure actual biking is important. But bike counters seem to be controversial, so funding them like this would remove the controversy at least.

The point about a safety hit is well taken.

Eric in Seattle
Guest
Eric in Seattle

How much would it cost to administer this program?
Also, I was under the impression that a sales tax was a third rail in Oregon.

longgone
Guest
longgone

I am in alignment with others here that see this for what it is,…Dumb, with a capital D.

On the other hand… it could do something like…
…. Be used to promote travel to Oregon for our scenic bike ways…..
…. combined with a provision for Saturday morning driving awareness classes and road side trash detail for all Oregon drivers convicted of infractions involving all vulnerable road users…. I don’t know…

Help
Guest
Help

It’s a terrible idea unless its high enough to seriously subsidize separated infrastructure. Otherwise you might as well just throw money down a toilet.

R-dat
Guest
R-dat

If you’re going segregate one product to start charging sales tax, why not a 1% on auto purchases? Heck, charge 2%!

Alex
Guest
Alex

That means I start paying more in taxes than cars do for registration at around $4500. That means I am paying more in taxes on a nice bike than I am on a crappy car. This tax is ridiculous.

Bicycles actually reduce the cost of gas (less demand), decrease congestion on roads and provide significant health and wellness benefits to the people using them. We should be promoting the use of bicycles and not punishing people for using them.

Let’s quit subsidizing oil companies, raise the gas tax, start taxing studded tires, start taxing people based on vehicle weight/tire choice, etc…There are many options that make a ton more sense than this.

Frank Selker
Guest
Frank Selker

My question is why pay attention to the City Club at all? They are not elected, they are not representative, they are not expert, and in the past they have not even been overly concerned with being accurate. They are self-appointed random people.

And their positions vary with who happens to be on a committee. For example a former chair of one of their committees that suggested less cycling access said “Bikes have too much clout in city hall.”

Jeff
Guest
Jeff

What exactly is this paternalistic organization? I reject their authority.

9watts
Guest
9watts

I am incredulous that this keeps coming up!

The State of Oregon should enact a 4% excise tax on new shoe sales. Revenue generated by this program is to be used specifically for the production and distribution of walking safety materials, walking safety programs at schools and community centers, and the purchase and installation of additional automated walking counters.

We’ve gone over this a bunch lately, but my takeaway is that this particular proposal of the City Club’s committee is based on a fundamental misunderstanding of how our transport infrastructure is *currently* funded–namely that those who do not drive or pay gasoline taxes *currently* pay a disproportionate share of the costs of building and maintaining our roads. http://www.vtpi.org/whoserd.pdfexcerpt in next post

In light of this fact I fail to see the point of this sort of nonsense. We should be doing everything we can to encourage *more* human-powered movement and *less* by car. This suggestion fails that test and is, frankly, offensive because it reifies this timeworn misconception.

Sunny
Guest
Sunny

Just buy the frame and wheels separate. No tax on parts.

Chris I
Guest
Chris I

User-revenue for infrastructure spending has steadily decreased for the past few decades, while costs have gone up. For some reason, it has become political suicide for anyone to propose a new tax, particularly on gas or automobiles. We need to change this attitude, and events like the Skagit and Minneapolis bridge collapses can be the rallying cry. If we need a 4% tax on bikes to help us achieve significant increases in the gas tax and automobile sales taxes that will be used to fund infrastructure maintenance and earthquake readiness, then I will consider this a good thing.

Alone, it is a terrible idea.

Brad
Guest
Brad

We need a sales tax, period. There are a great many unfunded needs in this state and ALL should pay for those needs, not just cyclists paying for earmarked projects. Oregon needs a statewide tax system overhaul.

Alexis
Guest

“”It would be irresponsible of us to say, ‘All these things are great, and someone else should pay for it.'”

Actually, I think that would be very responsible. Taxes redistribute money, so that’s generally how they work. Tax Peter to pay Paul, instead of the other way around like we do now.

This is the same stupid thinking that created the Arts Tax administrative nightmare.

Chainwhipped
Guest

Jeez. Where to begin . . .

Most of us own cars and already pay the fees and gas taxes associated with those vehicles, but let’s put that aside for now.

* Taxing a product that brings outside cash flow to the community is beyond foolish. There is no way our local bicycle industry will not feel the pinch of a tax like this one. One reason the bike business here does so well (and this is far, far bigger than anyone seems to realize) is that the $2,000 bike you’d buy here costs a couple hundred dollars extra in Washington. We have bike shops here that sometimes sell bikes at $5K-$10k to Seattle-ites. When that selling power shrinks, sales drop and when a business loses income, people get laid off. If you think bike industry employees aren’t contributing to your income, you’re very much mistaken.

* When I ride my bike to work, I’m leaving an empty parking space for you. You’re welcome. I’m not going to pay you for the pleasure of doing you a favor.

* The ruts you see in the road are not caused by bikes. No human on a bicycle can cause that level of damage to asphalt. If you need proof, look at the Springwater path.

* Bike infrastructure is for the benefit of car drivers as much as the cyclists. When I’m stuck behind some clueless two-wheeler who has chosen to ride a few blocks down MLK, all I can think is how easy it would be to pass him if the on-street parking was a bike lane.

* Why do we continue to put bicycles in a box separate from legitimate transportation? The issue is “Transportation Infrastructure”. Is there a shoe tax that pays for sidewalks?

In case you missed the news, it turns out that Gas Taxes only pay for half of the nation’s roads: http://dc.streetsblog.org/2013/01/23/drivers-cover-just-51-percent-of-u-s-road-spending/

So even if you never put your foot on a gas pedal your entire life, you’re paying for half the asphalt and yet you’re supposed to keep to the sidewalk, if you’re lucky enough to have one.

Drew
Guest
Drew

When we drive, we require a substantial government subsidy per mile.
When we walk or bike, this does not occur. We save the government money.
The idea of slapping an excise tax on bikes is nuts.
Until most drivers realize they are heavily subsidized, this nonsense will continue to circulate.
The fossil fuel and automotive industries want motorists to think they “own the road”, and will fight any social construct that suggests otherwise.

Buck
Guest
Buck

And of course a sales tax costs money to administrate, is unfairly burdensome for one small sector of the retail industry, will drive sales away from brick & mortar stores, and is effectively a penalty for the small minority of people who are actually doing something to cut down on producing CO2 in their personal lives…

Instead of burdening cyclists with another tax while continuing to subsidize the oil & gas industry, how about we get subsidized for a change? I’m thinking $0.10/mile would be a good place to start. Tires, brake pads, chains aren’t free, you know.

(I’m being facetious)

Other than that, excellent work Portland City Club for figuring out that cycling is a good thing.

Neil C
Guest
Neil C

Since the tax is to educate road users about bikes, by that I think the text above means Car/Truck drivers, shouldn’t they be the ones paying 4% Tax on their motor vehicles?

Brian E
Guest

Bike shops are already paying a tax that goes to building and maintaining roads. It’s called “Federal Tax” and “State Tax”. Then their are all the state and local fee’s that seem like taxes to me, but technically and semantically aren’t taxes .

When you purchase a new bike at a shop you are indirectly paying those taxes and fee’s.

Scott Bricker
Guest
Scott Bricker

Want to poll the feasibility of this tax? Talk to the Fred Meyer and Walmart lobbyists, where (back in 2006) ~75% of bike volume is sold (although value wise it’s only about 25%).

Mabsf
Guest
Mabsf

I think it’s a bad idea because it sets a precedence. Once in place, who says it can’t be jagged up? The other thing that makes me still bristle is that cars can be deducted as “green vehicles”, miles for work traveled etc. We have none of that for bikes… so I would feel double taxed!
As a small bike business owner I also have to say that $20.00 makes a difference: New bike riders some times have a hard time to pay $500.00 for a ‘toy’ so additional costs will put them off!

are
Guest

a tax calculated as a percentage of the sale price is a sales tax, not an excise. an excise would be per transaction.

JOHN ALAN NAYLOR
Guest

As a person that works in a bike shop at the end of the MAX line in Hillsboro, I can tell you that four or five out of every ten bicycles that are wrenched on are neither high-end nor even middle-end! They are the low-end, the Magnas and Pacifics, Fred-Meyers and Targets, piloted by the very segment of people that need cheap, affordable transportation the MOST.

From where I stand, it seems as though this ‘bicycle committee’ thinks there are dollars to be tapped from somewhere (???) in an already hyper-competitive retail market.

Dave
Guest
Dave

We get our yellow armbands when wepaythetax, ja?

aircooled
Guest
aircooled

Gas taxes don’t pay the true costs of maintaining roads and bridges. Motorists are also, to a large extent, getting a free ride.