State gas tax plan splits rural, urban county officials

Monday, May 22, 2000 | 9:40 a.m.

Under a legislative subcommittee's proposed new distribution formula, rural counties wouldn't get any less revenues, but virtually all new revenues would go to the state's rapidly growing urban areas.

After four years of debating the issue, the panel voted to base the distribution two-thirds on population and one-third on road miles, the Nevada Appeal reported.

Historically, the formula has benefited the sprawling rural counties because it was based not only on population and road miles but on vehicle miles traveled on the roads and on county area.

The gas tax generates nearly $40 million a year that the counties use for road construction and maintenance projects.

Clark and Washoe officials said their residents pay the maximum in gas taxes to help subsidize many rural counties that refuse to tax themselves. Those rural counties collect just 4 cents a gallon instead of the 9 cents they're allowed to impose.

Clark and Washoe officials argued their urban counties should get more of the money they generate and subcommittee members agreed.

"My county's taxpayers are exporting money to your counties and your taxpayers don't want to pay the 9 cents," Michelle Gordon of Washoe's Regional Transportation Commission told rural officials.

Mark Calhoun of Henderson agreed: "Exporting counties have had to tax themselves to the fullest when others refuse to tax themselves."

Douglas, Esmeralda, Elko, Eureka, Lander, Lincoln, Nye, Storey and White Pine counties have all refused to impose the extra nickel per gallon tax.

But Nye Commissioner Dick Carver said taking away revenues from rural counties would leave most of them unable to maintain roads because there's no way to make up for the loss.

He and other rural officials contended that a good share of the "subsidy" they get is gas tax revenue generated by their residents buying gas in urban areas.

"Rural counties are still taking a heck of a hit" with the new formula, despite efforts to soften its impact, said Bob Nunes of Douglas County.

Under the current formula, six counties generate gas tax revenues that help subsidize the other 11 counties.

Clark and Washoe generate the lion's share of the money used to subsidize the rural counties. Carson City, Douglas, Lyon and Storey counties also generate more revenue than they get back.

The biggest beneficiaries are Elko County, which generates only half of its $2.5 million share, and Nye County, which generates less than half its $2.7 million share, the Appeal reported.

Subcommittee members said the new formula may encourage the rural counties to add the nickel tax other counties are charging.

The panel was formed by legislation that set up a full-scale study of how Nevada distributes tax revenues among the counties.

The subcommittee will report its recommendations to the main study committee, which is expected to present them to the 2001 Legislature.