Measure on heavy truck tax advances

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CARSON CITY — A former state transportation chief said Thursday that a plan to tax the trucking industry is the fairest way of requiring road users to pay their fair share for highway wear and tear.

“It would be a giant step closer to equity,” former Nevada Department of Transportation director Garth Dull told members of the Assembly Transportation Committee.

A 1999 Transportation Department study never released to the Legislature found that heavy vehicles weren’t paying their share of taxes to the highway fund, he said.

After hearing Dull’s and other testimony, the committee voted to approve Assembly Bill 595 without a “do pass” recommendation. The panel forwarded the proposal to the Assembly Ways and Means Committee for further hearings.

The bill includes a 15 cents-per-mile “weight-distance tax” on trucks with gross weights of more than 50,000 pounds.

That would raise about $1.3 billion over the next eight years, but according to a trucking industry executive would double the taxes paid by some trucks.

Legislators are looking for ways to raise $3.8 billion to cover a projected highway construction shortfall. Tentative plans call for the Transportation Department to sell bonds to raise the construction money and begin work on 10 major projects between 2008 and 2015.

If bonds were paid off over 30 years, the state would need to raise about $170 million a year in additional revenue. The weight-distance tax would bring in nearly that amount.

Transportation Chairman Kelvin Atkinson, D-North Las Vegas, said the referral to the Ways and Means Committee will keep the bill alive.

Most bills under consideration at the Legislature must be approved today by a committee, or they will be declared dead for the 2007 session.

Through the referral, Atkinson said, legislative leaders from both houses can hold discussions on the weight-distance and other potential tax increases to raise the money needed for highway improvements.

“The Legislature absolutely cannot go home in June without taking action,” Atkinson said. “To do nothing would only allow our traffic problems to get worse.”

The $3.8 billion would pay for 10 “super” highway projects. Most of them are in Clark County and include several U.S. Highway 95 and Interstate 15 widening projects.

All types of highway taxes, except for a gasoline tax increase, will be considered as legislators looking for a funding solution, according to Atkinson.

A weight-distance tax might not end up in the final version of the bill, he said.

Despite indications this week that there’s an appetite among legislators to increase highway taxes, Gov. Jim Gibbons reiterated Thursday he will discuss new transportation proposals but veto them if they contain tax or fee increases.

“Any proposal like that deserves a very thoughtful assessment, but I reiterate my commitment not to raise any taxes on the state of Nevada,” Gibbons said Thursday.

Taxing the trucking industry, he said, would inevitably raise consumer prices for goods delivered by truck and could hurt Nevada’s business-friendly economy.

Gibbons said he was committed to addressing transportation needs but believed it could be done through “innovative, creative ways” of using existing revenue.

During Thursday’s Assembly Transportation Committee hearing, Dull said the 1999 study found heavy vehicles caused 40 percent of damage to state highways, while lighter vehicles caused 60 percent.

The study also determined light vehicles pay 75 percent of the taxes and fees going in the highway fund, compared with 25 percent by heavy vehicles.

Dull said the study found about 80 percent of interstate truckers passing through Nevada never stop in the state.

The study never was circulated and was “basically ignored,” although “a lot of people at NDOT believed in it,” said Dull, who worked for the Transportation Department for 36 years.

A weight-distance tax would be a tremendous increase in taxes for some in the trucking industry, according to Dull, but it would reduce taxes for others, and “there is no equity now.”

Dull said before the Legislature considers new ways of taxing vehicles, it should complete a new study and implement more equitable taxes on all types of vehicles.

“It has taken us a long time to get in this kind of shape, and it may take us a while to get out of it,” he said. “I am not an advocate of increasing anything until we get it right.”

That comment displeased Assembly members Susan Gerhardt and RoseMary Womack, both D-Henderson, who said there is a major congestion problem now that will only grow worse the longer it’s left unaddressed.

“We had crises before,” Dull said. “Start with the basics, a cost allocation study.”

In response to further questions, Dull said the Legislature could pass a weight-distance tax and then “tweak it in future years to be more equitable.”

The trucking industry’s chief lobbyist criticized the tax proposal.

Paul Enos, chief executive for the Nevada Motor Transport Association, said truckers traveling in Nevada now pay the 14th highest highway taxes and fees. With the weight distance tax, Nevada fees would be highest in the country, he said.

Enos said 11 percent of the miles driven in Nevada are by commercial trucks and they contribute 38.5 percent of the highway funds.

A typical 80,000 pound truck driving 80,000 miles in Nevada a year pays $6,000 in various taxes, he said. Those levies would increase by $12,000 with the new tax.

“Do you believe they are paying their fair share?” Atkinson asked.

“Yes, I do,” Enos replied.

Review-Journal writer Molly Ball contributed to this report.