Cathleen Allison/AssociatedPress Nevada Sen. John Lee, D-North Las Vegas, speaks Tuesday at the Legislature. Earlier Tuesday, Lee presented an alternative proposal to the governor's highway funding plan.
The Nevada Senate on Tuesday introduced Gov. Jim Gibbons' plan to fund highway projects by diverting Las Vegas-area room taxes - a plan that appears to fall well short of an expected shortfall of at least $5 billion for highway funding by 2015.
Under the governor's proposal, the Las Vegas Visitors and Convention Authority would kick in $20 million in the first year, then 30 percent of any growth in room taxes each year after that. SB574 scraps portions of the governor's original proposal, which would have diverted live entertainment and vehicle sales tax.
It's unclear what financial effect the measure would have on the visitor's authority or highway funding.
Sen. Bob Beers, R-Las Vegas, who introduced the bill, did not know how much the proposal would take from room taxes and referred questions to the governor's office.
"I don't know. It's the governor's bill," Beers said.
Gibbons spokesman Brent Boynton did not know how much funding the bill would provide for transportation projects, but added, "I do know it incorporates the elements that the governor wanted in a transportation bill. From here, it's a legislative matter."
Vince Alberta, spokesman for the visitors authority, said the bill poses problems for the authority's bond obligations.
"There are still legal obstacles based on contracts with bond holders," Alberta said.
Gibbons has vowed not to raise taxes to pay for Nevada's burgeoning transportation needs, and cover the shortfall. His original plan, broader than SB574, proposed raising about half the needed money.
A separate proposal brought by Sens. John Lee, D-North Las Vegas, and Dennis Nolan, R-Las Vegas, combines an increase in diesel fuel taxes, an increase in the per-trip fee paid by cabbies and a diversion of room and property taxes to raise about $2 billion.
Both plans were expected to be reviewed during a joint meeting today of the Senate committees on Taxation and Transportation-Homeland Security.
Under the governor's original tax diversion plan, the state Transportation Department could sell bonds and begin work on highway construction projects. The tax reallocation plan would remain in effect at least as long as it takes to pay off the bonds, according to state Budget Director Andrew Clinger.
Those reallocations would pay for new road projects over the next eight years. In the first two years, state transportation planners would start adding extra lanes to Interstate 15, as well as U.S. 95 from Washington to Craig Road in the Las Vegas area.
The tax reallocation plan has come under fire from gambling and business interests, who have said that raiding funds used to promote tourism in Nevada is shortsighted and will hurt the economy.
The reallocated money is apart from projects funded by the state Department of Transportation's general two-year $1.4 billion budget.
The Assembly Ways and Means committee is still considering AB544, a bill that would add an additional $170 million, mostly from the state's general fund, for work on I-15.