A new use for the odometer: determining tax you pay

By Cy Ryan

Friday, Aug. 9, 2013 | 12:26 p.m.

Electric cars and vehicles that get more miles to the gallon are more efficient for drivers but are causing a dip in money for roads in Nevada that is now primarily being filled by a tax on gasoline.

But the Nevada Department of Transportation is starting a study on alternate ways to pay for building roads in lieu of the gasoline tax.

Department Director Rudy Malfabon will brief the transportation board Monday about the agency's partnership with Washington, Oregon, UNLV and UNR to study the feasibility of collecting taxes on the miles a vehicle travels.

The Taxpayers Network says Nevada imposed an excise tax of 33 cents per gallon, or the 12th highest in the nation, in 2012. It did not include local gas taxes.

Malfabon estimates there will be $40 million less a year in road building money by 2016 due to increased fuel standards and electric vehicles.

"By 2016, car manufacturers have been tasked to produce 1 million electric vehicles. Increased corporate average fuel efficiency to 37 miles per gallon by 2016 will cause a further dent to the highway fund revenue for transportation," the analysis prepared by Alauddin Khan, chief performance analysis engineer for the department, says.

By 2025, the average fuel efficiency standards will be raised to 55 miles per gallon, Khan said.

Oregon has passed a law allowing the use of a mileage-based user fee system instead of a tax per gallon of fuel on a voluntary basis, Malfabon said.

The switch could raise many concerns, including those living in rural areas paying more than city residents and a fear that "Big Brother" will be monitoring the amount of traveled miles by some device in the vehicle, he admitted.

A vehicle mile tax might include putting a unit in the vehicle that will record the miles traveled between every gas fill-up. Or the device could record the miles traveled every year when renewing vehicle registration.

"The fuel tax has lost over 35 percent of purchasing power due to inflation and continues to lose the purchasing power," Malfabon said in his memorandum to the board, chaired by Gov. Brian Sandoval.

The study is not intended to discuss raising taxes, fees or generating additional revenue. Its aim is to look at a stable source of money to build and repair highways. And it will be up to elected officials to decide whether to change the present tax system.

The study will look at such things as the financial impact on low-income residents and high-mileage users, how tourists should be treated, the distribution of revenue among local agencies and equity between heavy-duty vehicles and passenger cars.

The department intends to gather feedback from the public and a variety of groups.