Gasoline tax holiday out of reach in Nevada


Motorists in three states, including Nevada, might never see the savings of the gasoline tax holiday touted by two presidential candidates.

California, Oklahoma and the Silver State each have enacted laws that would increase their fuel taxes to offset any drop in the federal tax, so motorists in those three states wouldn't see the plan's potential savings at the pump.

Sen. John McCain, R-Ariz., and Sen. Hillary Clinton, D-N.Y., have proposed a temporary halt of the 18.4 cents-per-gallon tax from Memorial Day to Labor Day.

Nevada law says the state's gasoline tax increase "must be equal to the amount by which the federal tax is reduced." Comparable language appears in Oklahoma and California law.

Kent Cooper, the Nevada Department of Transportation's assistant director of planning, said the state's law was enacted to ensure funding for construction projects and bond funding if federal money were cut.

"It was put in place as protection, should the federal program go away," he said.

Nevada receives about $235 million per year from the U.S. government for road construction projects and maintenance. It wasn't immediately clear how much of this comes from fuel taxes.

If that money were to dry up, the state would be unable to provide needed services such as repaving, restriping and plowing roads, Cooper said. The state would also have to cancel a number of construction projects already under way, such as the Interstate 15 north widening project, he said.

Canceling those projects "costs you a whole bunch of money," he said.

Nevada's law helps ensure that such a situation is avoided.

Cooper isn't concerned by the plans being floated by McCain and Clinton because both call for replacing the lost fuel tax revenue to the federal highway trust fund -- estimated at about $10 billion -- with other revenue.

Either way, Cooper said he doesn't believe motorists will see any savings at the pump because neither plan forces oil producers to lower their prices.

"That seems to make this not a very good proposal," he said.

A number of national economists have publicly denounced the fuel tax holiday plan, saying the savings would not be passed on to consumers.

California and Oklahoma officials could not be reached for comment.

Tennessee has a law similar to Nevada's, but an amendment passed in 2006 suspended the provision until July 1, 2008, said Julie Oaks, a spokeswoman for the Tennessee Department of Transportation.

Meanwhile, Clinton called for a vote in Congress on a summertime suspension of the federal gasoline tax, the Associated Press reported.

Jon Summers, a spokesman for Sen. Harry Reid, D-Nev., said the gas tax holiday was not expected to be part of an energy bill introduced this week, but it could come up as an amendment.

Contact reporter Francis McCabe at fmccabe@reviewjournal.com or 702-387-2904.

 

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