Bob Beers Candidate for governor says budget surplus makes action possible

CARSON CITY -- With gasoline prices continuing to rise at the pump, Republican lawmaker and gubernatorial candidate Bob Beers revived a proposal Thursday to eliminate the state fuel tax to provide some relief to angry and frustrated motorists.

But the Las Vegas state senator's idea was rejected by an Assembly leader and questioned by the governor's office, which rejected a similar Beers proposal last year.

Beers added a new wrinkle to his proposal, first made after gasoline prices jumped in the wake of Hurricane Katrina. Then, Beers suggested a temporary lifting of the 17.65-cent-per-gallon state share of the gasoline tax.

Now, however, Beers is calling for a permanent repeal of the state gasoline tax. Road maintenance and improvements could be continued by using the state's large budget surplus, he said.

Beers wants Gov. Kenny Guinn to call a special session of the Legislature to enact the repeal immediately.

"Gas prices are high and will continue to rise as the weather gets warmer and the demand for gasoline increases before Memorial Day," Beers said.

"I urge Governor Guinn to act now so that when prices rise, we will have already taken steps to soften the impact."

Beers said Nevada will have a tax surplus of between $550 million and $600 million by the end of the current two-year budget in July 2007, or nearly $300 million a year. That is more than enough to make up for the loss of the state gasoline tax, which generated $184 million in fiscal 2003-04, according to the Department of Transportation.

Beers said using the surplus to fund road projects also would eliminate an existing problem with the gasoline tax: It does not keep up with demand because of eroding purchasing power. The cost of road improvements is increasing, but the gasoline tax remains at 17.65 cents a gallon. It is not adjusted for inflation.

Eliminating the tax and using the surplus would solve this problem by providing increasing funding for roadwork, he said.

A panel called the Blue Ribbon Task Force on Transportation is looking at the transportation funding issue. The panel met in Elko on Thursday. The Nevada Department of Transportation has estimated that state highway needs will fall $3.8 billion short of available revenue by 2015.

Guinn was not receptive to Beers' call in September for a special session to temporarily repeal the gasoline tax, and he appeared similarly cool to the idea on Thursday.

His spokesman, Steve George, said Thursday that before Guinn would consider such a request, the leadership of the state Senate and Assembly would need to come forward and say they supported the idea.

"Leadership would need to say, 'This is an issue we want to have a special session on,' " George said.

Guinn also wants to see a detailed plan from Beers on how to pay for road projects once the gasoline tax is done away with, George said.

Only the governor can call a special session of the Legislature.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, suggested instead that Beers talk to his GOP colleagues in Washington about repealing tax breaks for oil companies, which are reporting huge profits.

And depending on a projected surplus for road projects is bringing a lot of uncertainty into the equation, she said.

"If we do have extra money, putting more of it into road projects makes a lot of sense. But we don't know how much of a surplus there will be compared to our needs. A lot of new students have moved to Nevada," Buckley said, referring to growing education needs.

There is also the question of how to ensure that any gasoline tax reduction is passed on to motorists, she said.

"I think it would be shortsighted to take money from road projects and have us all sitting in traffic longer using more gas," Buckley said.

Beers said eliminating the tax not only would help Nevadans but would encourage tourism as well. Lower gasoline prices could entice visitors to come to Nevada, he said.

Asked how the repeal would guarantee lower prices at the pump, Beers said market pressures would resolve the concern.

"If a station doesn't lower its price, I'm going across the street," he said.

Beers also said economic fluctuations that could make future tax surpluses disappear is no reason not to repeal the gasoline tax.

"I do not find the threat of an economic downturn a good reason for overtaxation," he said.

Beers said his plan is a "win-win."

"We have a very severe long-term problem with our revenue structure for the creation and maintenance of our state highways," he said.

"My proposal resolved that problem going forward long term, and in the short haul helps Nevadans and visitors. The coming run-up in gas prices is going to be pretty painful."

A one-day special session of the Legislature -- and there is no guarantee that a repeal could be accomplished in one day -- would cost between $30,000 and $50,000.