Legislative subcommittee settles road tax distribution

Walking a tightrope between Clark County's overwhelming need and rural poverty, a legislative subcommittee has laid out a new plan to divide gas tax money among Nevada counties.

At stake is the near $40 million-a-year counties use to maintain roads that aren't the state's responsibility, from urban arterial to dirt roads leading into the hills.

The new formula, while it guarantees rural counties won't get less, will send practically all the new dollars to the state's rapidly growing urban areas.

Historically, gas taxes have been divided using a formula that includes not only population and road miles but vehicle miles traveled on the roads and area. That benefited rural counties at the expense of urban areas with higher density and more multi-lane roads.

The money is collected from gas sales throughout the state, then divided among the counties.

Clark and Washoe officials in particular argued that their residents pay the maximum in gas taxes to help subsidize many rural counties that refuse to tax themselves. They said their counties should get more of the money they generate.

But smaller-county officials, from Nye's Dick Carver to Bob Nunes of Douglas, said penalizing small counties by taking away money would simply leave most of them unable to maintain roads because there's no place in their budgets to make up the loss.

They repeated arguments that a good share of the "subsidy" they get is gas tax revenue generated by their residents buying gas in urban areas.

There are six counties generating money that helps subsidize the other 11 counties in Nevada.

After four years of debating the issue, the subcommittee voted to base the split two-thirds on population and one-third on road miles - eliminating miles traveled and county area from the equation.

But recognizing that will be "a substantial hit" to small counties, they agreed to calculate "road miles" instead of "lane miles," easing small- county fears that their lack of multi-lane arterials would shift nearly all the cash to urban areas.

They also voted to "hold harmless" the subsidized counties, guaranteeing they will never receive less than they did under the old formula as long as statewide revenues are level or go up.

Subcommittee chairman Marv Leavitt of Las Vegas said the new formula would send most new dollars to the big counties that generate the money. The fund is projected to grow from $37.5 million in 2002 to $45.8 million by 2011, and about $8 million of the $8.3 million increase would be kept by the counties generating it.

While Clark and Washoe generate most of the money used to subsidize the small counties, Carson City puts in $220,000 a year, Douglas another $200,000 and Lyon nearly $107,000. Even Storey, with just one gas station, will generate more revenue than it gets back under the existing formula.

The biggest beneficiaries are Elko, which generates only half the $2.5 million a year it is now receiving in local gas tax money, and Nye, which generates less than half its $2.7 million share for fiscal 2001.

Nunes said even with the hold-harmless provisions, "Rural counties are still taking a heck of a hit" with the new formula. He asked the subcommittee to base the split 50-50 on population and road miles, but Washoe and Clark officials said that was too much, especially since some small counties collect just 4 cents a gallon instead of 9 cents they are allowed to take.

"My county's taxpapers are exporting money to your counties and your taxpayers don't want to pay the 9 cents," Michelle Gordon of Washoe's regional Transportation Commission told rural officials.

Douglas, Esmeralda, Elko, Eureka, Lander, Lincoln, Nye, Storey and White Pine counties have all refused to collect the extra nickel per gallon, and all of those except Douglas and Storey are being subsidized.

"Exporting counties have had to tax themselves to the fullest when others refuse to tax themselves," said Mark Calhoun of Henderson.

The majority on the panel agreed the small counties should be guaranteed they won't get less money. But they also agreed with Steve Varela and Dave Roundtree of Reno and joined Leavitt in suggesting that a formula which refuses to increase their subsidy may encourage those counties to add the nickel tax other counties are charging.

The subcommittee was created by legislation which set up a full-scale study of how Nevada collects and distributes tax revenues among the 17 counties. It will report its recommendations directly to the main study committee which is expected to present them to the 2001 Legislature for approval.