Funding bill hits a roadblock

Two Democratic senators threatened to hold up passage of the proposal to divert three existing taxes to a road building fund because it will put only $1 billion toward the state’s $5 billion highway construction shortfall.

Sen. Bob Coffin, D-Las Vegas, vowed to try today to amend Assembly Bill 595, which passed the Assembly 40-2 earlier Friday, to tack on an increase of 6 cents per gallon in the diesel fuel tax and force the trucking industry to help alleviate the mammoth shortfall.

Sen. Mike Schneider, D-Las Vegas, agreed that the Legislature must raise more revenue for highway construction.

“I am prepared to stay here all month long,” Coffin said of the legislative session that is scheduled to end Monday.

“Some of us aren’t,” replied Assembly Transportation Chairman Kelvin Atkinson, D-North Las Vegas, who helped craft the bill that would allow the state to float a $1 billion bond and begin work on highway projects.

The remarks came during a joint hearing of the Senate Taxation and Transportation committees. The Taxation Committee is expected to act on the bill during a hearing this morning.

Cars pay 33 cents per gallon in state and local fuel taxes at the gasoline pump, while trucks pay 27 cents per gallon in diesel taxes, Coffin said. Truck operators should pay an equal amount of tax, he said.

Schneider said he was confident the 10-member Senate Democratic caucus will agree to include other revenue sources before supporting the bill.

Republicans have 11 members in the Senate, but the bill needs at least 14 votes to pass.

“We need to step up and really do something. We are getting further and further behind,” Schneider said.

“There was no thought put into this (bill). It was hurry up and go.”

Legislative leaders reached an agreement Thursday with the Las Vegas Convention and Visitors Authority, rental car companies and local governments to use the three existing taxes to pay for highway construction.

Gov. Jim Gibbons, who has promised to veto any tax increase, endorsed the agreement.

Senate Transportation Chairman Dennis Nolan, R-Las Vegas, said Friday that putting $1 billion toward a $5 billion problem is like “placing a Band-Aid on a large wound.”

But, Nolan added, the current bill “is about all we can get and still be acceptable to both houses and the governor.”

Absent the funds to build the 10 super highway projects identified as essential by a task force last year, the Nevada Department of Transportation will push back the start date for some projects.

Plans had called for the roads to be build between 2008 and 2015.

Work on some will not start before 2017.

The bill requires the department to do a cost-benefit analysis to ensure all of the projects are necessary.

If the bill receives committee approval, it will be sent to the Senate floor today for a final vote before being forwarded to Gibbons for his signature.

The bill requires support of two-thirds of senators because it includes increases in revenue coming to the state. Under the state constitution, any proposal that increases taxes or brings additional revenue to the state needs at least a two-thirds majority.

Under the agreement in AB595, the following would occur:

• The convention authority will contribute $20 million a year in room tax revenue to the highway construction fund.

• Clark and Washoe county governments will reallocate to the highway construction fund some existing property tax revenue now spent on local capital improvement projects.

• Rental car companies will give the state one-quarter of the revenue they now generate from imposing a 4 percent tax on car rentals. The state has allowed the companies to collect and keep the tax to pay their car registration fees.

The Transportation Department would use the highway funds initially to widen portions of Interstate 15, which is seen as critical to bringing tourists to Las Vegas as well as carrying local residents.

While rental car companies voluntarily agreed to give the money to the state, Legislative Counsel Brenda Erdoes said that still represents additional revenue for the state and the bill needs a two-thirds majority.

“It is money the state wasn’t getting before,” she said.

Mike Dayton, Gibbons’ chief of staff, said the provision does not violate the governor’s pledge against increasing taxes and he will sign the bill.

“If they add diesel fuel taxes, it would be a tax increase,” Dayton said.

Earlier Friday, every Assembly member except Minority Leader Garn Mabey and Assemblywoman Francis Allen, R-Las Vegas, voted for the road funding plan.

Allen said she voted against the bill because it doesn’t do enough to solve the road funding problem.

Mabey opposed tapping county property taxes for roads.

“These funds are used to build parks, soccer, baseball and football fields, swimming pools and other projects that make our communities a better place to live,” he said.

When “little Johnnie asks, ‘Can we go to a park to swing?’ ” Mabey said, they should tell him, “The funds went to Interstate 15 to help the biggest corporations in Nevada.”

County reluctantly goes along

They’re not crazy about surrendering a slice of their property tax revenue, but Clark County officials won’t stand in the way of a legislative plan to fund $1 billion in highway construction.

Clark County Commissioner Bruce Woodbury said the county probably could have raised enough of a stink to cause the compromise to collapse, but the need for road funding is too great.

“We’re not getting up and opposing because we want money for transportation,” said Woodbury, who is also chairman of the Regional Transportation Commission board. “We want a transportation plan, even if it’s only a start.”

The Nevada Department of Transportation claims it is $5 billion short of fully funding 10 statewide “superprojects,” including the expansion of Interstate 15 and U.S. Highway 95 in the Las Vegas Valley, and a Boulder City bypass road.

The highway funding plan approved by the Assembly on Friday would take $1 billion from portions of three existing taxes.

In the plan’s first year, Clark County would have to give up about $14 million in property tax revenue earmarked for local capital improvement projects, Woodbury said.

The county’s share would be higher in subsequent years and would last “for however long they decide to take it away, I guess,” he said.

Woodbury said it’s too soon to know the specific effects of the lost property tax revenue, but there are three capital projects that are most likely to be impacted:

• A new, 250-bed detention center for low-level offenders.

• New offices for the Clark County Health District.

• A countywide parks improvement program.

Woodbury said construction of the health district offices might have to be delayed, and the parks program could face cutbacks so work on the detention facility can go forward.

“That’s an essential project, and we’re just going to have to take money from other sources. We’ll just have to reprioritize.”

Woodbury and other county officials were hoping for the state to come up with the highway money on its own because local residents have already stepped up to fund highway construction in the area.

“If this is the only way they can do it, so be it,” Woodbury said.

County voters approved Question 10 taxes for road work in 1990 and again in 2002.

Through Question 10, the county solely underwrote the $1.1 billion Las Vegas Beltway, helped pay for the $35 million U.S. 95/Beltway interchange in Henderson, renovated the I-15/Blue Diamond Road junction and took over maintenance responsibilities from the state for the Strip.

All represent work normally handled by state, not local transportation agencies.

By HENRY BREAN/REVIEW-JOURNAL