TRANSPORTATION:

Gasoline, diesel fuel are latest targets of tax talk

By Brian Eckhouse (contact), David McGrath Schwartz (contact)

Saturday, May 2, 2009 | 2 a.m.

Senate Majority Leader Steven Horsford

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Senate Majority Leader Steven Horsford is suggesting an increase in the diesel fuel tax to help close the gap between the money needed for transportation projects and the money available.

And he is pushing for the Legislature to take other steps to address a long-term funding shortfall estimated by the Nevada Transportation Department at $6 billion over the next decade for major projects.

After a round-table discussion Thursday evening among lawmakers, contractors, transportation advocates and regional transportation leaders, Horsford said, “The diesel fuel tax should be on the table.”

Raising the diesel tax is seen as much more politically palatable than raising the gasoline tax.

Even Paul Enos, CEO of the Nevada Motor Transport Association, which represents the trucking industry, agrees the state needs to find a way to pay for roads, and he notes that the state hasn’t raised fuel taxes since 1992.

But, he said, if the diesel tax is to be raised, the gasoline tax should be too.

“For a tax to target one industry, one fuel, doesn’t make sense,” he said.

Estimates by the Nevada Taxpayers Association say raising the tax on diesel fuel by 1 cent would get the state roughly $3.5 million per year, and raising 1 cent on the gasoline tax would net about $8.7 million annually.

John Madole, head of the Northern Nevada chapter of Associated General Contractors, said during Thursday’s meeting the state should raise fuel taxes even more than that. He suggested the state consider raising the diesel tax 5 cents and the gas tax 5 cents.

Sen. Mike Schneider, D-Las Vegas, has repeatedly pointed out this session that as cars become more fuel efficient, drivers pay less in gas taxes. Most of the state’s highway money comes from gas tax revenue.

Schneider, chairman of the Senate Energy, Infrastructure and Transportation Committee, told members of the round-table to come up with ideas by Monday.

He pointed out that Horsford still has bills he can introduce.

Increasing the fuel tax is a non-starter for the governor’s office and the transportation department, however.

Because “the governor has taken the position that he doesn’t support new taxes,” Susan Martinovich, the department’s director, said, “that’s the position of this department.”

Horsford said there are other ways the state could raise money for transportation projects. He pointed out that Nevada is one of the few states that doesn’t charge for driver’s license exams, and it hasn’t seriously considered raising its commercial and noncommercial license fees since 1981.

He said any money raised by changes made in this legislative session could be used to pay off bonds sold for transportation projects. For example, Horsford said, if the state could raise $25 million over the biennium, it would allow the state to raise $250 million in bond money.

Martinovich said selling bonds isn’t an option because “we need a consistent funding source” to repay them.

Martinovich said one of her hopes for additional transportation funding is that other states won’t use their maximum stimulus allotments, potentially giving Nevada a shot at more federal money for roads.

While Martinovich appears more focused on the immediate needs and projects that are ready to go but lack funding, Horsford was saying he wanted to have long-term solutions in place before the session ends on June 1.

“In the short term, we need to meet the goals of reducing congestion and putting people back to work,” Horsford said. “But we also need to figure out how we’re going to meet needs going forward, five, 10 or 20 years down the road.”

Martinovich isn’t seeking the entire

$6 billion immediately, however. Environmental studies have yet to be completed on several of the state’s roads projects, and rights-of-way still need to be bought for many of them.

And even if all the studies were done and rights-of-way secured, construction on all the projects can’t be done at once, Martinovich said. That “would put Vegas into more gridlock.” Projects that need

$900 million to $1.2 billion in funding are ready to go, though. About $700 million would be appropriated for preservation work statewide, Martinovich said. She expects another

$1 billion in projects to be ready for construction by this time next year.

One project that could benefit from another funding source would be the

$155 million widening of U.S. 95 between Rainbow Boulevard and Ann Road, which would add a lane in each direction.

Discussion: 9 comments so far…

By Facts_are_Facts

5/2/09 at 6:36 a.m.

Comment removed by staff.
By Lasvegastrucking

5/2/09 at 7:23 a.m.

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I own and operate several heavy trucks here in Nevada this just gets me fired up.Semi trucks average a little less than 5 miles per gallon.Now they want to raise the tax on our fuel? Every item we own or use in our day to day lives came to us on a truck. From the food you eat, to the clothes on your back, to the roof over your heads. It came on a truck. Between the federal heavy use road tax of $500.00 per truck per year, the state license fees of aprox $2000.00 per tuck per year, plus the thousands of dollars we already pay in fuel tax they want more? How dare they!It's time to elect new people with new ways of thinking into our government. Enough old school make the tax payer pay for it way of government. We don't have any more to give!
STOP THE SPENDING! You are bleeding us dry. Stop the assistance programs that support the lazy. Stop awarding bad ways of government. Government needs to be ran like a business. You have to spend less than you have coming in or you're out of business. A business has to keep it's costs within certian lines to survive. Nearly all the people in politics today couldn't make it in the business world. Look it up. The facts speak for themselves.
By neiman1

5/2/09 at 8:07 a.m.

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Hide the tax. If you raise gas tax people will see it every time they fill up and that will upset voters. Put it on diesel and it gets "hidden" in everything we buy so we can soak the cash out of the voter without him doing it.

It's the Democratic Party way.
By davidwayneosedach

5/2/09 at 8:31 a.m.

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One cent is a bargain. They are thinking of raising the gasoline tax in Boston 19 cents.
By Patrick_R_Gibbons

5/2/09 at 10:13 a.m.

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With cars becoming more and more fuel efficient this is kind of a dumb tax to increase. (not that there is any tax to increase that is smart).
By Harley

5/2/09 at 10:58 a.m.

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Those proposing/supporting tax increases can kiss their political careers goodbye.
By gmag39

5/2/09 at 11:08 a.m.

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Oh please, Harley. Please try seeing the forest for the trees today.
patrick; Lame-oh. Weak argument, my opinion, sir.
Nieman; you are parrot-like with your anti-tax rantings.
At some point, alternate sources of revenue will have to be tapped. Reality sucks.
By Harley

5/2/09 at 12:51 p.m.

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Reality indicates publicly funded educational services to be a costly failure and will ultimately be reflected upon as the reason America wasn't capable of competing intellectually in the world and will eventually become a sub servant to its intellectual superiors.

"We cannot solve today's problems with the same level of thinking which created them." --A. Einstein
By Patrick_R_Gibbons

5/2/09 at 1:14 p.m.

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Gmag,

Seriously, you have to do better than this. Please drop the dogma and come up with a real counterpoint.