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April 24, 2014

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Clark County finds business support for gas tax hike

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Steve Marcus

Kurtis Keeler of Jamestown, New York, replaces a pump after filling up at a gas station on Blue Diamond Road Thursday, April 14, 2011.

Clark County businesses appear to have thrown their support behind a gas tax hike the county commission is considering this summer.

The overall results of a county-sponsored survey show more than 90 percent of local businesses support the tax.

The Clark County Commission plans to vote on the proposal to tie or “index” the gas tax to the inflation rate by Oct. 1 at the latest. The move would increase the tax by about 3 cents per gallon every year until 2016, when voters statewide would have the chance to continue fuel indexing or discontinue the practice.

Responses from the county’s business impact survey show that 2,134 respondents said the tax proposal would pose “no significant burden” for them. Just two businesses said it would impose a burden.

And 509 businesses did not answer the question of whether the proposal would be a “significant burden” to their businesses. Instead, those respondents gave the county simple statements of support or opposition, with 291 supporting and 218 opposing.

Taken together, the county says it received 2,425 positive responses and 220 negative responses.

County commissioners have also broadly endorsed the gas tax proposal, giving supporters of the tax encouragement that the measure will pass with the necessary support of at least five of the seven commissioners.

“Leaders in the community are seeing the importance of this for economic development,” said Commissioner Mary Beth Scow, who said she’d vote in favor of the proposal if the vote were held today. “They’re feeling like this is a really positive way to help our residents get around town and also keep our roads open for our economy.”

Others, however, are unsure of whether the county’s business impact statement says anything meaningful.

The county solicited opinions from a mix of 125 businesses, business groups, or government agencies or offices. The list, however, doesn’t necessarily reflect the Clark County economy. About half of the groups surveyed appear to be in the legal or professional services sector, and several law firms on the list frequently lobby the state Legislature.

Others on the list are strong supporters of the tax.

Large business groups such as the Las Vegas Metro Chamber of Commerce and the Las Vegas Global Economic Alliance are on the list and support the tax, seeing it as the only way to pay for new road projects needed for the efficient and safe movement of goods through Clark County.

While these groups publicly supported the gas tax, it’s unclear whether they submitted comments to the county.

A letter was sent to 125 organizations, soliciting comment on the proposal, which the county said would "generate needed revenues" for road construction, create 10,000 jobs and increase the gas tax.

But the county did not have a list of the specific companies or individuals who responded favorably or unfavorably to the tax proposal during the June 18 to July 12 public comment period.

It is unclear whether the 220 negative responses represent any particular sector of the economy or have any other commonality. Likewise, it’s unclear who told the county they support the tax.

“That certainly isn’t a way to gauge public support or opposition,” said Victor Joecks, a spokesman for the Nevada Policy Research Institute, a free market advocacy group generally opposed to tax increases. “All this really shows it that people who benefit from something at the expense of the greater population have a greater incentive to talk about that proposal.”

Taken at face value, the county’s survey indicates that the vast majority of local businesses say the higher fuel prices proposed would not significantly affect their businesses.

Click to enlarge photo

The gas prices at a Shell gas station on East Cactus Drive off of St. Rose Parkway in the southern Las Vegas Valley on Tuesday, March 20, 2012.

As the chief proponents of fuel indexing, the Regional Transportation Commission of Southern Nevada welcomed the survey results.

“Both large and small businesses throughout Southern Nevada support this initiative, and the support it received from the logistics, car sales, real estate, and the utility industry is particularly significant,” said Tina Quigley, RTC general manager, in a statement.

Joecks, however, said it’s difficult to gauge the value of such a survey without knowing who responded in support and who answered in opposition.

“You’ve got a huge case of selection bias here, where the people who stand to benefit from the tax increase have a large incentive to respond to a survey like this,” he said.

Still, the business survey could encourage commissioners to vote for the measure.

By the rules of the bill that the Legislature passed in June, five of the seven commissioners must support the measure for it to become law.

Commissioner Steve Sisolak has raised repeated objections to the proposal, but it appears that at least five commissioners support the measure.

Commissioners Larry Brown and Chris Guinchigliani serve on the board of the RTC, which lobbied in favor of fuel indexing at the Legislature. Both Brown and Commissioner Tom Collins said months ago they would support the proposal.

Other commissioners appear to be in favor of the proposal as well. Should the vote be held today, Scow and Commissioner Susan Brager said they would vote for fuel indexing.

“I am going to do what I believe is right for our community,” she said. “I'm not political that way. I want to do what is best for our community no matter what.”

Commissioner Lawrence Weekly did not reply to a request for comment.

For years, gas tax revenues have been declining as motorists use more fuel-efficient cars. Elected officials in Nevada also have not raised the gas tax for decades, meaning the purchasing power of gas tax revenue has declined over the years as inflation has made road construction more expensive.

While elected officials understand the need, some have concerns about the proposed means of paying for roads.

Sisolak said he does not want to vote for something that allows drivers of expensive electric vehicles to escape the tax.

“That doesn’t seem fair,” he said. “It seems extremely regressive in the worst sort of way. … You can’t take, in my opinion, certain people out of the mix, which is what they’ve done.”

Sisolak has said multiple times that he prefers a “vehicle miles traveled” tax, which means drivers pay a tax for the miles they drive. The more people drive, the more they pay, regardless of what type of fuel their vehicles use.

Scow said it was not an “easy decision,” but she weighed the consequences of a fee increase for Clark County residents and businesses versus the potential for economic development and job creation.

While she said she shares Sisolak’s concern that drivers of electric or hybrid vehicles may not pay a “fair” share for road projects through the gas tax, she said the commission has no choice but to vote on what the Legislature gave them.

“If I were in charge, this would go to the voters first,” she said. “The state forced this on us and we can’t do it how we want.”

Others say Sisolak’s desire to implement that type of tax may be greater than the government’s ability to do so.

“I don’t think the VMT is viable at this time,” said Eric Herzik, a UNR professor who studies the implementation of a vehicle-miles traveled tax. “I’m basically a proponent of VMT but I don’t know anybody who’s working on this who says it’s ready to implement right now. You’re looking at 10 years from right now. In the meantime, the problem of funding road construction keeps getting worse, so indexing is a bridge between the traditional gas tax and VMT.”

Brager echoed Sisolak’s concerns with fairness but said the fuel indexing path appears to be the only option open to commissioners.

“We have the responsibility of making sure we do what is best for Clark County,” she said.

The commission will likely vote on the measure in August or September.

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