Highways to get additional $1 billion

CARSON CITY -- The deal was done Sunday, as legislators approved a plan to put an additional $1 billion toward the state's highway needs but defeated a proposed ballot question on raising diesel taxes.

The Senate floor vote on Assembly Bill 595, which redirects revenues from hotel room taxes, property taxes and car rental taxes to underpin bonds for road construction, was 18-3 Sunday evening, with three Democratic senators from Clark County voting against it.

Sen. Bob Coffin, D-Las Vegas, was the most aggressive critic of the bill. He had previously argued that additional revenue needed to be raised to combat the ever-growing traffic congestion in the Las Vegas Valley. He called the proposal that was passed by the Senate a "miserable excuse for a bill," "shameful," "half-baked" and "indefensible."

In committee hearings, Coffin had unsuccessfully pressed Gov. Jim Gibbons to support raising the diesel tax to provide more money for roads.

"We allowed an industry to completely escape because the governor said no new taxes," Coffin said Sunday after senators rejected an amendment proposed by Senate Minority Leader Dina Titus, D-Las Vegas, that would have put a question on the 2008 ballot asking voters in each county whether to set taxes on diesel fuel at the same level as taxes on gasoline.

Discussion on the Senate floor was heated, with Democrats saying the bill let the trucking industry off too easily and didn't adequately address a highway funding shortfall estimated at $5 billion over the next decade.

"Under AB595, the biggest users and abusers of Nevada's highway system, large commercial trucks, are allowed to shirk all responsibility," Titus said.

State and local taxes on diesel fuel are 27 cents a gallon, while those on gasoline are 33 cents a gallon.

Titus accused Gibbons of having already broken his pledge not to support tax increases with the bill, which redirects a "tax" on rental cars that the companies keep.

"The governor says it's not a tax, it's a redistribution, but a rose by any other name would smell as sweet," she said.

Titus noted that the Legislature has allowed counties to put tax questions on the ballot in other cases, such as a bill also passed Sunday by the Senate that would allow residents of Washoe County to decide whether to raise taxes to fund school construction.

"Ask the people of Nevada if they want truckers to pay what they pay and to share in the burden of building and fixing our roads," Titus said.

Sen. Bob Beers, R-Las Vegas, said the funding in the bill was for building roads, not repairing damage. Most damage to roads is caused by weather, not vehicles, Beers said.

Senate Transportation Chairman Dennis Nolan, R-Las Vegas, said he agreed with the idea of having truckers contribute to road building, but he said there were "technical problems" with Titus' amendment.

Nolan said diesel taxes are collected differently than gasoline taxes, presenting "at the very least an accounting nightmare for the state and local (governments)." He said a ballot question was likely to confuse voters.

Sen. Mark Amodei, R-Carson City, said legislators would do more about the issue when the next Legislature convenes in 2009. "This is a job this Legislature is up to: Using the hearing process, using the information available, and coming back in 18 months," he said.

Titus' amendment failed on a party-line vote, with all 10 Democrats supporting it and all 11 Republicans opposing it.

Also rejected was an amendment from Sen. Terry Care, D-Las Vegas, that would have taken away a 2005 tax break for golf courses. It failed 14-7.

Democrats Coffin, Bernice Mathews of Reno, and Mike Schneider of Las Vegas joined the Senate's 11 Republicans in voting against the amendment.

Schneider said he was concerned homeowners' associations that run golf courses could face a tax liability under the proposal.

But senators agreed by voice vote to another amendment proposed by Care that calls for revenues to be spent on road projects in the same counties where the taxes were paid. The Assembly agreed to the amendment late Sunday, meaning the bill will be sent to the governor to be signed. Gibbons supports the bill, which is a more modest version of tax redirections he proposed a few weeks ago.

Despite Gibbons' insistence that the car rental diversion is not a tax increase, state lawyers consider it a creation of new state revenue, so the bill needed two-thirds, or 14 votes, to pass. In the end, most Democrats, including Titus, voted for the transportation package. Coffin was joined in dissent by Care and Maggie Carlton, D-Las Vegas.

Coffin accused Republican senators from Clark County of having "failed to do their duty for their constituents."

Sen. Warren Hardy, R-Las Vegas, said that combined with the $1.2 billion in transportation funding elsewhere in the budget, legislators were putting $2.2 billion into roads. "I think we're acting responsibly," he said.

Schneider said Gibbons' refusal to increase taxes couldn't last, calling the transportation proposal a "shell game."

"'No taxes' will come to an end next session," Schneider said. "There will be a cash call. We can't go on like this."

State Senate Majority Leader Bill Raggio, R-Reno, defended Gibbons.

"I am not the governor's apologist," he said, "but I just want to make the point that the governor's message, from his State of the State address, has been clear, that he is not going to support tax increases."