Guinn says no special session to consider killing gasoline tax

Tuesday, Sept. 13, 2005 | 10:37 a.m.

CARSON CITY -- Gov. Kenny Guinn said Monday he would not convene a special session of the Legislature to consider suspending the state's tax on gasoline to give some relief to Nevada motorists.

Guinn said there is no support from lawmakers for a special session to act on the plan proposed last week by Sen. Bob Beers, R-Las Vegas, who suggested a two-months moratorium on the 17.6 cents per gallon gasoline tax.

Beers, a candidate for the GOP nomination for governor, suggested that the suspension would cost the state $42.5 million. He said that could be made up by taking money from the rainy day fund that now has $159 million.

Beers could not be reached for comment on Guinn's decision, but a letter from the National Taxpayers Union, which claims 3,500 Nevada members, urges the governor to declare a "gas tax holiday."

The Sept. 12 letter signed by Kristina Rasmussen, government affairs manager of the union, said Nevada motorists pay one of the most oppressive gas taxes rates in the country. She said between the state, local and federal taxes, Nevadans are paying more than 41 cents a gallon. She said it was time to use the money in the rainy day fund to cushion the blow" to motorists.

Several legislators questioned whether gasoline stations would pass on the savings to motorists that were faced with the rising price or whether they would continue to charge the same prices.

Guinn's statement came after a meeting of the state Board of Finance that authorized the issuance of $200 million in highway construction bonds to be paid off by collections from the gasoline tax and federal funds.

State Treasurer Brian Krolicki told the board that reducing the gasoline tax temporarily would have "very serious consequences" in financing the bonds. He said the companies or people who buy the bonds have a contract for the state to pay off the bonds.

"We can't impair the contract," Krolicki said. "This must be treated very carefully.

But he added that the state could substitute revenue in retiring the bonds, as suggested by Beers.

The proceeds from the bonds will be used to finance the final phases of widening of U.S. 95 in Las Vegas from Interstate 15 to Rainbow Boulevard and for building the Henderson Interchange of U.S. 95 and Interstate 215.

The money will also be used for construction of the freeway in Carson City and the freeway project from Reno to Carson City.

The 20-year bonds will be sold Oct. 19 and Krolicki said he expects an interest rate of 4-4.5 percent.

This was the fourth bond issue for the so-called "super projects." A bond issue of $100 million sold in 2000 at a 4.8 percent interest rate; a $197 million bond issue in 2003 at 2.7 percent and a $188 million bond at 4.0 percent in 2005.