Declining gas tax revenue means fewer road projects

Richard Brian

Construction continues on the Interstate 515 Galleria Mall interchange at U.S. 95 and Sunset Road.

By Brian Eckhouse (contact)

Tuesday, June 9, 2009 | 2 a.m.

The valley’s highway planning agency says gas tax revenue is dropping so dramatically it may decide Thursday to opt for only $414 million in highway projects over the next 20 years — not the $1.4 billion it anticipated just 2 1/2 years ago.

As a result of lopping off $1 billion in road work, some projects will be delayed indefinitely, according to officials with the Regional Transportation Commission of Southern Nevada.

Henderson, for instance, will complete a new U.S. 95 interchange at Galleria Drive this fall, but a plan to extend Executive Airport Drive (which intersects St. Rose Parkway) to Interstate 15 has fallen off the drawing boards.

The county delayed multiple widening projects along major arterials, including Russell Road between the Las Vegas Beltway and Rainbow Boulevard, Sunset Road between Decatur and Valley View boulevards, and Hollywood Boulevard between Charleston and Lake Mead boulevards.

The reason for scaling back Las Vegas Valley highway projects: Americans are driving less, so gas receipts — a significant funding source for public roads projects — have fallen sharply. (The RTC collects 9 cents per gallon of gas bought locally).

Gas tax revenue from July through March fell 4.9 percent from the same period the previous year. The RTC budgeted $72 million in gas tax revenue for the fiscal year ending June 30, but probably will collect closer to $67 million. The agency estimates next year’s revenue at $66.7 million.

Road construction by residential developers has also slowed down dramatically, with only half the construction permits issued this year compared with the same period a year earlier. Permits are down 80 percent since the height of the boom, in 2006.

In Henderson, May was the quietest month for road construction in memory, city officials said. The slowdown represents the collapse of the residential building industry.

“Anything that’s developer-driven isn’t going to happen,” says Jonna Sansom, Henderson’s city engineer. “Development has come to a halt.”

Jorge Cervantes, Las Vegas’ director of public works, estimates that developers make up 90 percent to 95 percent of road construction valleywide.

In Cervantes’ view, only one positive has emerged from the collapse in development: With demand for construction so low, the cost to hire companies is 20 percent to 30 percent lower than what officials often expect.