Local price of gasoline to rise when fuel tax indexing adjusts

Watch for the price of gasoline to go up at the end of the month when fuel tax indexing results in an adjustment to the local tax rate.

Last year, voters authorized indexing adjustments based on the Producer Price Index. Based on a 10-year rolling average index, producer prices have risen 6.05 percent since last July. That means the tax on a gallon of gasoline in Clark County will go up by 3.35 cents a gallon beginning July 1. The rate initially climbed 3.25 cents a gallon when indexing began in the middle of the fiscal year on Jan. 1. Now, it’s at 6.6 cents a gallon on top of the state’s 24-cents-a-gallon tax.

The result: A fill-up for a car with a 10-gallon tank would cost a motorist 66 cents more when the new rate becomes effective.

The additional revenue generated by the higher fuel tax enables a greater bonding capacity for construction projects. In some cases, it enables a higher level of borrowing or provides matching funds that would make local entities eligible for federal grants and loans.

Tax rates will increase at different rates for other types of fuel. The tax on diesel fuel will rise 3.35 cents a gallon to 6.59 cents. For liquefied petroleum gas, the local tax rises from 2.51 cents a gallon to 5.1 cents. For compressed natural gas, it will go from 2.44 cents a gallon to 4.97 cents. And, on A55 alternative fuel, it will rose from 1.18 cents to 2.4 cents a gallon.

The tax increase and the road projects local entities have been able to undertake were discussed Thursday by the Regional Transportation Commission.

Commissioners say even though motorists are paying more, public response has been positive to indexing because of the road projects that have been approved now that there’s more revenue to dedicate to long-neglected programs.

Commission staff said through April, 25 road projects have been approved worth $62.4 million. That’s resulted in more than 800 new construction jobs since indexing began.

In the first quarter of 2014, Clark County collected $5.9 million in new revenue — 4 percent ahead of projections.

Among the high-profile projects begun since indexing began were new 215 Beltway bridges at Fort Apache Road and Durango Drive, a roadway reconstruction project at Desert Inn Road and Lamb Boulevard and new traffic signals on Fort Apache Road at Maule Avenue and Warm Springs Road.

Commission Chairman Larry Brown, a Clark County commissioner, said even though motorists are paying more out of pocket as a result of indexing, he’s found constituent response to be favorable.

The Regional Transportation Commission was big backer of indexing, promising to work on 185 transportation projects resulting in more than 9,000 local jobs and increasing bonding capacity to $700 million. Indexing expires at the end of December 2016, but could be renewed.

Contact reporter Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow him on Twitter @RickVelotta.