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Bike industry leaders oppose bike tax proposal amid push for alternatives

Posted by on May 15th, 2017 at 2:03 pm

North Portland Bikeworks new location-2-1

(Photos by J. Maus/BikePortland)

Right now in Salem, lawmakers are drafting a statewide transportation funding package that aims to raise over $8 billion. As we reported last week, one small piece of that new revenue — an estimated $2 million a year — would come from a 5 percent tax on the purchase of new bicycles.

The tax would add $35 to the average price of a new bike purchased at a bike shop. It would be an unprecented step for Oregon and the only tax of its kind in America.

Not surprisingly, bike shop owners throughout Oregon are very concerned.

Most of the money raised in the forthcoming bill will be spent on a handful of highway expansion projects that Nigel Jaquiss, a Pulitzer Prize-winning reporter for Willamette Week says, are based on “shaky assumptions about traffic jams”.

“Bikes cannot be the scapegoat here because someone was frustated in their car once.”
— Chris DiStefano, River City Bicycles

While the bike tax will be a relatively tiny portion of the bill; the policy principles and political ramifications go way beyond just a dollar amount (our neighbors in Seattle, for instance, worry it could normalize bike taxes). Perhaps this is why the policy director for The Street Trust, Gerik Kransky, told us he feels the bike tax debate is, “the toughest political challenge” the organization has faced in his seven-year tenure.

As pressure to fund transportation builds in Salem, The Street Trust is playing a risky game: They support the overall package (along with the Transportation for Oregon’s Future coalition) while at the same time they oppose the bike tax that lawmakers see as a key element of it. The Street Trust has also organized opposition to the bike tax from Oregon bike industry leaders.

20 Oregon-based bike business owners and employees have signed a letter drafted by The Street Trust that will be sent to lawmakers later this week. Here’s an excerpt:

“We write to you as business leaders in Oregon’s bicycle industry and as partners in finding solutions to our state’s transportation and infrastructure needs. As Oregon businesses and taxpayers, we support a balanced transportation funding package that includes significant Safe Routes to School and bicycle investments, both on our roadways and on dedicated bike and pedestrian pathways.

We are happy to see the legislature exploring a variety of funding options. As users of our transportation network, we embrace our role in helping pay for our transportation needs through the gas tax, vehicle registration fees, payroll tax, and other tax dollars, all of which we pay currently. However, we are concerned by discussion of a new bicycle excise tax, as we believe it would negatively affect Oregon’s bicycle industry.”

The letter goes on to cite the $440 million of economic impact and 2,645 jobs generated by Oregon’s bicycle industry. Despite that monetary strength, the letter states that many bike businesses operate on “slim profit margins with a fine line between success and failure” and that, “a bicycle excise tax would have a negative impact both on bicycling and on our businesses.”

This nascent bike industry lobby is pushing for alternatives to the bike excise tax. They include:

  • Additional motor vehicle taxes or registration fees;
  • An optional checkbox on the state tax return to donate to trails;
  • A tire tax for all vehicles (including bicycles) that would correspond with usage like a gas tax; or
  • Another revenue mechanism that would be more widely distributed and not target a specific industry.

We wanted to hear directly from local bike shop owners. Last week we emailed about a dozen of them. For good measure we reached out to the president of the National Bicycle Dealer’s Association. Here’s what we heard:

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Nathan Roll – Metropolis Cycle Repair