Transportation official says road projects need more cash

CARSON CITY -- State Transportation Director Susan Martinovich told legislators Tuesday her agency must find an additional $450 million a year in revenue by 2016, or she will be forced to scuttle $6 billion in highway projects to relieve traffic congestion.

But legislators of both parties expressed frustration about their chances of raising taxes for roads during the 2009 Legislature if Republican Gov. Jim Gibbons keeps his no-new-taxes pledge.

State Sen. Dennis Nolan, R-Las Vegas, said they might have to increase taxes to pay for highway construction "over the objections of the governor."

Under the state constitution, a two-thirds vote of both houses of the Legislature is needed to increase taxes. The same vote would be required to override a governor veto.

"It is undeniable that at some point we have to look at funding this," Nolan said. "We need to find a permanent funding source, so we don't have to address this every session."

He said legislators in 2007 failed to meet their responsibilities when they approved a plan to fund $1 billion in highway construction needs when the total need was much larger.

Gibbons press secretary, Melissa Subbotin, said the governor has not backed off from his pledge to veto any bill that increases taxes.

Martinovich told members of the Legislature's Committee to Study Transportation Issues that the $450 million in additional annual revenue would cover costs of paying off a $6 billion bond over a 20-year period.

By issuing the bonds, NDOT could start work on the projects as soon as design work is completed.

Without the money, she said, the state would have to suspend work on such Southern Nevada projects as widening Interstate 15 and Craig Road.

During the 2007 Legislature, the Nevada Department of Transportation estimated it needed around $270 million a year in additional revenue to cover bonds to pay for $3.8 billion in construction projects.

That figure has risen to $6 billion because of inflation and increased cost of highway construction materials.

Martinovich said all projects planned by her agency have gone through a cost-benefit analysis and should be built to relieve traffic congestion.

"Our goal is to have them ready (for construction) when the money is available," she said.

During the 2009-10 period, Martinovich said, NDOT will need an extra $80 million to continue its construction program. That amount would increase each year until hitting $450 million annually in 2016.

But legislators questioned whether it made any sense for them to propose taxes for roads if Gibbons intends to exercise a veto.

Martinovich said she has not discussed the new financial needs with Gibbons but plans to meet with him soon.

Nolan, chairman of the committee, urged members of both parties to talk with their caucuses and agree on sources of funding that all legislators can support.

If they can agree on a solution by a scheduled June 4 meeting, Nolan said, then legislators next year will not have to go through protracted battles about highway taxes.

But state Sen. Randolph Townsend, R-Reno, said that developing a tax plan if Gibbons won't support it would be a futile exercise. He asked Martinovich to meet with Gibbons and find out whether he will back any road tax plan.

"You work for the governor," Townsend said. "There comes a point when we are going to have to have guidelines from him, so we aren't wasting our staff's time and our time."

Senate Minority Leader Dina Titus, D-Las Vegas, said the panel is "just spinning its wheels" if it develops a tax plan the governor will veto.

"He has made it a point repeatedly that he will not support any new taxes," she said.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or (775) 687-3901.