Road to ruin

So much for “One Nevada.”

Once again, the classic parochial parlor game has erupted into a geographic version of a 2-year-old’s temper tantrum.

The city of Reno is considering suing the state to avoid what it deems an unconstitutional tax grab. The highway funding law that takes effect July 1 would, under a steadily increasing formula, take about $700,000 a year from Reno’s property tax revenues to pay for state roads.

Even though the money would stay in Washoe County for transportation infrastructure, the city is crying, “Mine.”

Councilman Dave Aiazzi said he would ask his fellow board members to seek a restraining order against the state. Even if the city doesn’t sue, he said, raising the issue will inform residents that “local services will have to be cut.”

Down here, where tourism drives the state’s economy, the Las Vegas Convention and Visitors Authority has been able to ease some of the pain of the state’s room-tax grab by inserting language into the law that requires the authority’s board to sign off on any tax diversions. Meanwhile, Clark County’s government has been eerily quiet despite potentially significant losses in property tax revenue. Perhaps the County Commission’s transportation guru, “Beltway” Bruce Woodbury, is simply trying to take one for his party’s chief. Republican Gov. Jim Gibbons was the architect of Assembly Bill 595, which redirects enough existing revenue to float a $1 billion bond for various transportation needs.

Gibbons first floated the idea of a room tax shift just weeks before the 2007 Legislature was scheduled to adjourn. The shift was introduced in bill form during the last week of the session and passed hastily. Gibbons, who declared he would veto any measure that raised taxes, signed the tax shift into law last week.

Woodbury has requested an agenda item for a July meeting to discuss future transportation strategies. Maybe it should be dubbed: “Moving forward: How not to get screwed.” The county will lose about $14 million in property tax revenues in the first year — a number that will increase over time. (That’s chump change compared with the estimated $300 million the county will lose over a decade thanks to the green construction tax breaks passed by the Legislature.)

Maybe Clark County thinks taking one for the team in 2007 will spare it the tax man’s rod in 2009. For now, commissioners have been left to cry the state was “robbing Peter to pay Paul.” That’s how former assemblyman and current Commissioner Tom Collins sees it from his new perch overseeing the state’s wealthiest local jurisdiction.

The convention authority certainly protected its interests in a sizable five-subsection portion of the law. The authority is to “use its commercially reasonable best efforts to issue bonds … for the purpose of providing money to the Department of Transportation to assist in paying the cost of any project in the county,” the law states.

The new language also explicitly gives the authority’s board the final say on which projects it wants to bond, up to $300 million. Authority spokesman Vince Alberta said the tourism board just wants to ensure there is a nexus between the project and tourism.

So expanding Interstate 15 makes sense as a tourism artery. But wouldn’t improvements to U.S. Highway 95 and surface streets create alternatives for Clark County motorists to keep them from congesting I-15?

I can make that connection. Given the soft language of the law, the authority doesn’t have to. And who’s to judge the “reasonable best efforts” of an agency spending $890 million for bigger bathrooms and more “public space” in its convention center?

The fiefdoms are permitted to complain, warn and threaten suit only because, once again, the legislation was so shoddily crafted. The blame can’t be leveled solely at Gibbons. Without his, dare I say, leadership, the Legislature likely would have adjourned with no solution.

Who knows what the courts will say if Reno does ultimately sue the state? If the local government, 5-cent property tax shift is unconstitutional, you’d think a court would render the whole thing dead. Then again, our courts tend to get mighty creative.

Then we could kiss goodbye the money to leverage $1 billion. In 2009, we’ll be $6 billion or more short, with no improvements in sight for Southern California tourists. Maybe they’ll stay home to play on the Indian reservations rather than sit in traffic.

Perhaps that’s when the state decides to tax trucks passing between Utah and California. Truckers were initially willing to pay higher taxes as part of what the industry hoped was a “fair share” solution.

Maybe 2009 will be time for that fair share. Maybe by then, with legislative term limits looming, lawmakers will be more willing to solve a problem.

That doesn’t mean there won’t be conniptions along the way.

Erin Neff’s column runs Sunday, Tuesday and Thursday. She can be reached at (702) 387-2906 or by e-mail at eneff@reviewjournal.com.

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