The Las Vegas tourism downturn is disrupting more than the hospitality industry — it’s complicating plans for major road construction.
A decline in room tax revenue has interrupted plans to fund a $250 million project on Interstate 15 between Blue Diamond Road and Tropicana Avenue.
Nevada Department of Transportation Director Susan Martinovich said the agency was counting on Las Vegas tourism boosters to fund the project with a share of money from hotel room taxes.
But the Las Vegas Convention and Visitors Authority, the group that was supposed to provide the room tax money, wants more time before starting payments.
“The one thing we did ask from them … is that we could delay until January or the first quarter of 2010 the startup of the payment of those bonds,” authority President and Chief Executive Officer Rossi Ralenkotter said.
The authority has already lowered room tax revenue projections for the current fiscal year from $243 million to $190 million.
That leaves less money available to back road bonds, something the authority is required to do under a 2007 law.
In the meantime, transportation officials will seek to continue preliminary work with the hope they can arrive at a funding plan without too much delay.
Martinovich will go before the authority in May to discuss available options.
“The department is still under way hiring the design build team,” she said. “We’ll be selecting a final team very shortly but, as indicated, we haven’t really secured the money yet.”
Both Martinovich and Ralenkotter said they are committed to the project proceeding with as little delay as possible.
The construction project would be a major overhaul of about five miles of highway that serves as the main approach to Las Vegas from Southern California.
In addition to a wider road, plans include designated ramps that would separate vehicles exiting to the Strip from the main flow of traffic.
The result will be fewer conflicts between merging traffic and a smoother flow on the highway.
“This is a huge project,” said Tom Skancke, a consultant on the project. “You’re adding two lanes of concrete northbound and southbound.”
Skancke said the funding hiccup illustrates why volatile revenue sources like hotel room taxes shouldn’t be depended on to build roads. He said costly infrastructure payments should be spread more evenly among drivers, through fuel or mileage taxes or tolls.
Tourists alone can’t produce the stable revenue needed for long-term projects such as major road improvements, Skancke said.
“The Legislature has no plan. They want everyone else to solve this problem but they don’t want to tax it,” he said. “The traffic congestion in this town is not caused by one industry. Traffic congestion is caused by residents.”
Contact reporter Benjamin Spillman at firstname.lastname@example.org or 702-477-3861.