Nevada's highway funding shortfall debated

Transportation officials from around the state warned lawmakers Tuesday that unless Nevada increases investment in roads, the state's tourism-dependent economy could suffer a slowdown.

Business representatives and Sen. Mark Amodei, R-Carson City, joined in to urge the Senate Taxation committee to pass SB384, which would raise and reallocate various taxes and fees in order to pay for road and transportation projects.

A blue-ribbon panel convened by former Gov. Kenny Guinn calculated that Nevada has a $3.8 billion shortfall in road construction funds.

Currently, consumers pay 17.65 cents in state taxes per gallon of gas. Under the proposal, that tax would increase 6 cents over two years, hitting 23.65 cents per gallon in July 2008. Each year thereafter, the tax would go up with inflation, but no more than 4.5 percent.

The bill also increases the minimum services tax paid on used cars from $6 to $25, and increases the fee for a new driver's license by $20. It would also reallocate certain existing sales taxes to be used for road construction.

Together, the increased taxes and fees are estimated to bring in $3.68 billion over eight years for the state Department of Transportation.

Gov. Jim Gibbons has said that while he would support some increases in user fees, he opposes increasing gasoline taxes.

Business groups and transportation officials told lawmakers that unless they act to fight traffic congestion, the economy will suffer. Nevada's economy relies on a steady stream of both cargo trucks and visitors entering the state, they said.

Lobbying efforts in support of the measure include a Carson City billboard stating "Detour Ahead: State Road Budget Missing," and billboards in Las Vegas stating "Get your head out of the asphalt."

Jeremy Aguero, a consultant for advocates of the bill, showed studies that indicate rising construction costs and inflation could add $840 million to the projects' price tag if lawmakers delay. He also emphasized that congestion is causing lost productivity, as time delays in Southern Nevada increase. He estimated that congestion already costs Southern Nevadans $380 million annually, or $279 per capita.

Steve Holloway, a lobbyist who represents Las Vegas contractors, said that the city has 40,000 new hotel rooms under construction, and that will result in 90,000 new jobs over the next five years. Unless state policy-makers make bold moves on transportation, that growth can't continue, he said.

"If we gridlock I-15, if we gridlock I-80, I believe we will gridlock the entire state economy," said Jacob Snow, regional manager of the Regional Transportation Commission of Southern Nevada.

Snow added that by using stretched-out bond repayment plans and other forms of creative financing, the state may be able to avoid the increased gas tax.