Transportation officials put hazard lights on idea of mileage-based tax

By Cy Ryan

Monday, Aug. 12, 2013 | 2:25 p.m.

A study on ways to tax motorists on the miles they drive instead of the gasoline they purchase drew opposition and questions from members of the Nevada Board of Transportation on Monday.

“I’m not sure this is the best way to go,” Lt. Gov. Brian Krolicki said.

Member Tom Fransway of Winnemucca said he favored raising existing taxes rather than starting a new system.

The state Transportation Department outlined its study, showing that it will collect less from the gasoline tax in the future due to more fuel efficient cars or electric vehicles.

Department officials said the federal and state tax totals 55 cents a gallon.

Alauddin Khan, who is in charge of the department study, said the state will collect $38 million less in gasoline taxes by the year 2017. The taxes are used to build and repair highways.

Khan said motorists pay $15-$18 a month in fuel taxes.

Other states also are conducting similar studies on billing the motorist for the miles driven instead of for gas.

After the meeting, Board Chairman Gov. Brian Sandoval said there were still a lot of questions to be answered. Among his questions was whether Nevadans would be charged for miles driven in another state.

Krolicki, former state treasurer, said bonds were issued to build roads with a guaranteed repayment by the gasoline tax. Thus, the constitutionality of the switch would need to be studied, Khan said.

Khan said Nevada can’t impose this new method of financing highway construction alone. Other states must follow suit.

Khan said the study is expected to be completed before the 2015 Nevada Legislature convenes.

The vehicle miles tax — for which officials hope to keep administrative cost of collection between 3-5 percent — could be assessed by placing a device in a car to track mileage and could be collected at the gas pump or after a three-month period. Sandoval said he did not want any new fee to be imposed on an annual basis.

Khan stressed the department is contacting other agencies and the public to weigh in on issues such as whether commercial vehicles should be charged more than regular autos and how this would affect motorists in rural areas who drive further to their job than city dwellers.

Sandoval said the expected decline in gasoline tax collections could mean the state might have to chip in money from its general fund for roadway construction.

The board asked for periodic reports on the study.