Published Tuesday, Sept. 3, 2013 | 12:33 p.m.
Updated Tuesday, Sept. 3, 2013 | 5:35 p.m.
The levy drivers pay on a gallon of gasoline is going up after Clark County commissioners approved a fuel tax increase at their Tuesday meeting.
The issue: Commissioners considered a proposal that would allow the county’s 52.5 cents-per-gallon fuel tax to increase with inflation each of the next three years.
The vote: 6-1, with Commission Chairman Steve Sisolak opposed.
What it means: Drivers will begin paying more at the gas pump, about 3.2-cents per gallon, starting in January. That amount will increase over each of the next three years as the tax rises with inflation, capping out at a maximum increase of 10 cents in 2016. Voters will then get a chance to decide whether to extend the indexing for another 10 years in November 2016.
For now, the added revenue means the Regional Transportation Commission will be able to spend up to $700 million on new projects in the coming years, averting a potential slowdown in roadway construction as current funds dwindle. The move is also expected to create about 5,000 construction-related jobs over the course of several years.
Although the price of gasoline has more than doubled since 1995, the Regional Transportation Commission’s share of the fuel tax, its primary means of paying for road construction (it also receives a portion of sales tax receipts), has remained flat at 9 cents per gallon.
Inflation has eroded the purchasing power of that 9-cent levy while more fuel-efficient cars have further curbed revenue growth. Most of the $60 million the levy generates annually is being used to pay off bonds for previous projects, leaving the RTC with $22 million per year for new construction, an 80 percent decrease from the $136 million it spent annually over the last decade.
The tax indexing was authorized by the Legislature during its past session and has received broad support from local business groups and unions.
On Tuesday, supporters, many of them clad in hard hats and neon work vests, packed the county commission chambers. They promoted the tax increase as a way to create jobs, improve the valley’s infrastructure and make the region more economically competitive.
“If you drive on the roads, the roads are built with taxes you pay when you buy gasoline. It’s a user fee,” said Danny Thompson, executive secretary-treasurer of the Nevada AFL-CIO. “It’s going to create jobs. It’s going to increase the diversity in our economy. The better the roads are, it’s good for everyone. We wholeheartedly support this.”
Opposition to the increase was voiced by several people, who expressed concerns about overburdened taxpayers and derided wasteful government spending, encouraging the county to make better use of the funds it already has.
But the combination of new jobs and infrastructure development proved too strong and the council voiced near unanimous support for the proposal, with a few reservations.
“I think the (RTC) did an excellent job of laying out what this tax can mean to Southern Nevada,” Commissioner Chris Giunchigliani said. “The projects are not crazy. It’s pavement reconstruction, roadway reconstruction, Beltway bridges, traffic signals ... It is infrastructure that we need in order to make this community thrive and be able to move back and forth.”
Commissioner Lawrence Weekly emphasized the need for construction jobs created by the fuel tax indexing to go to local residents. Although the RTC cannot guarantee all the jobs go to local employees, Director Tina Quigley said it is considering several measures that would give local firms a slight preference when bidding for these projects.
The lone opposition to the tax came from Commissioner Steve Sisolak, who has voiced skepticism about the proposal since it first surfaced last year.
“I have advocated and argued all along that I think all taxes need to be fair, stable and broad-based, and I don’t think this tax is any of the three,” he said.
Part of Sisolak’s objection centered on the unfairness of a tax that lets drivers of expensive hybrid and electric vehicles contribute less to road funding.
He also raised concerns that the wording of the ordinance opens it up to a legal challenge that could nullify the tax increase, although county legal staff disagreed with his assessment.
Several other commissioners agreed with a point made by Sisolak that Clark County doesn’t receive its fair share of state transportation dollars, but it wasn’t enough to sway them from approving the tax.
According to Sisolak’s numbers, county residents have paid $821 million to the state through its portion of the fuel tax over the past five years, but has received only $309 million back in state-funded construction projects.
“I wish we could get the same concerted effort by these same groups to lobby that Clark County start getting its fair share of some of the money that the citizens are currently paying in fuel tax,” he said. “Our citizens, in my opinion, are overburdened with taxes and now they’re paying taxes to subsidize the rest of the state. I’m concerned and I’m troubled by that.”