County Commission hits the gas on fuel tax ordinance

By Conor Shine

Tuesday, July 16, 2013 | 3:39 p.m.

Clark County residents could find themselves paying an extra 3 cents per gallon of gasoline to help pay for new road construction under a fuel tax increase discussed Tuesday by the County Commission.

The issue: Clark County commissioners must decide whether to enact a fuel tax increase authorized by the Legislature in the 2013 session.

The vote: No vote was taken. Commissioners directed staff to draft an ordinance enacting the fuel tax increase to be introduced at their Aug. 6 meeting.

What it means: After staying flat for the past 18 years, the amount of tax Clark County residents pay for fuel would increase each of the next three years.

Residents pay 52.2 cents worth of federal, state and local taxes on each gallon of fuel, with about 9 cents directed to Clark County.

Because the county’s portion of that tax has not increased since 1995, its relative purchasing power has declined. Coupled with more fuel-efficient vehicles leading to less gasoline being used, the Regional Transportation Commission faces a steep drop in funding available for road construction, from about $135 million per year over the past decade down to $22 million annually going forward.

The proposal before the County Commission would tie the fuel tax — which covers gasoline, diesel and any other combustible liquid used to power a vehicle — to the inflation rate through 2016, resulting in about a 3-cent raise in each of the next three years.

For residents, that means an extra $16 in taxes the first year, topping out at an extra $52 after the third year.

That added revenue has local officials dreaming big, with the potential to use it to purchase bonds worth $700 million to $800 million to pay for new construction.

The funding would be used in part to supplement road repair and construction for surface and arterial streets, but officials also have eyed putting the new revenue toward advancing a variety of crucial transportation projects, including the first phases of the proposed Interstate 11 project, bringing the entire 215 Beltway up to freeway standards and making improvements to the Maryland Parkway and Paradise Road corridors.

New construction generated by the tax is projected to create 5,500 direct jobs, with another 4,000 coming from spillover effects, said Tina Quigley, general manager of the RTC.

“If this does not pass, I think we’re going to be stalled for a little while," she said. “It certainly isn’t enough to continue to grow and diversify our economy.”

Commissioners directed staff to draft an ordinance enacting the tax increase, beginning a process that likely will culminate in a final vote on Aug. 20 after a public hearing.

With a month of deliberations left to go, commissioners displayed varying levels of support for the tax increase and raised several questions they’d like addressed before casting their vote.

Among the concerns was the fiscal impact the tax increase would have on RTC buses and the county’s fleet of vehicles and whether it’s fair to electric or hybrid cars that don’t use as much gas.

Commissioners seemed to agree the county needed more capital for roads and highways, but at least one member was unsure if the fuel tax was the best way to generate needed funding.

“My problem is I believe the tax needs to be broad-based, it needs to be stable, and it needs to be fair. My concern about this tax is it’s none of those,” Commission Chairman Steve Sisolak said. “I see people driving around with an $80,000 or $90,000 Tesla (electric cars) and they pay zero while the student who’s driving a $1,000 car is going to pay who knows how much extra per month. That just doesn’t seem fair to me.”