RTC manager says fuel tax hike needed to fund road projects

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.

Transportation experts say if lawmakers don’t approve legislation to increase revenue for street and road projects, they’d have only about $22.4 million a year for new construction — about enough to build one freeway interchange, one mile of road or one beltway segment without bridges.

Members of the Regional Transportation Commission of Southern Nevada received a briefing today from General Manager Tina Quigley, who made a similar presentation to legislators last month in support of Assembly Bill 413, which would enable the Clark County Commission to implement fuel tax indexing.

The RTC is funded with a mix of motor vehicle fuel tax and sales tax.

Quigley said transportation leaders developed a list of unfunded projects needed over the next 10 years costing $4.5 billion. That list was whittled to “critical needs” projects that had a price tag of $807.6 million.

Among the projects deemed critical that could be without funding are development of Nevada’s portion of the proposed Interstate 11, including the two-phase bypass of Boulder City, improving the Las Vegas Beltway to freeway standards, widening U.S. 95 between Ann Road and Kyle Canyon, and a new Interstate 15 interchange just south of Mesquite.

Other projects that could go unfunded are traffic control features, including ramp meters, the timing and coordinating of traffic signals, dynamic message signs and traffic cameras; improvements to the Maryland Parkway corridor between downtown Las Vegas and McCarran International Airport; improvements to Paradise Road in conjunction with the Las Vegas Convention and Visitors Authority’s Las Vegas Global Business District convention center improvement project; and a series of “complete streets” improvements that would widen sidewalks, add bicycle lanes, improve street intersections and add landscape and light streets.

County fuel tax revenue peaked at $70.9 million in the 2006-07 fiscal year and has steadily declined to an estimated $61.6 million in 2013-14.

A decrease in fuel tax revenue could also affect the state’s ability to generate matching funds for federal grants.

There are several reasons fuel tax revenue is falling.

Since 1995, the RTC has received 9 cents of the state’s 24-cent fuel tax. Since then, vehicles have become more fuel efficient, cutting consumption. Since the recession, motorists have driven less. There also are more alternative-fuel vehicles on the road.

In addition, the RTC is committed to spending more on long-term debt for bonded highway projects approved by the Nevada Department of Transportation. Inflation also has hurt the RTC’s purchasing power over time.

Quigley said it’s important to upgrade streets and highways to accommodate local residents as well as companies moving to Southern Nevada through the governor’s economic development initiatives.

The RTC board, which includes elected officials from Clark County and its municipalities, approved a resolution in support of fuel-tax indexing.

Under Assembly Bill 413, the County Commission would be allowed to raise or lower fuel taxes annually based on the movement of the producer price index. In theory, that would enable the county to collect taxes at the same rate as historical increases in the cost of highway and street construction. The index would be based on a rolling 10-year average to avoid major spikes in the tax.

Finance experts say a 5.81 percent increase in the index based on a 10-year average would increase revenue to $26.8 million the first year, $55.3 million the second year and $85.3 million the third.

The estimated increase in fuel tax would be 3 cents a gallon the first year to 6.2 cents the second year and 9.6 cents the third with indexing.

The RTC also is monitoring another fuel-tax bill. Senate Bill 377 would increase the tax by 2 cents a gallon on a variety of fuels at the beginning of each calendar year through 2023, beginning Jan. 1, 2014.

Because proceeds from the fuel tax goes to multiple sources, the RTC wouldn’t benefit as much under that legislation and the board supports the indexing plan more than a 20-cent-a-gallon increase over 10 years.

The RTC board also got its first look at its 2013-14 budget, a $488.3 million plan that includes $226.1 million for highway improvement projects and property acquisitions.

The board will conduct a public hearing and consider approving the budget on May 16.