Gibbons lays out transportation funding plan
Gov. Jim Gibbons laid out his plan Thursday to fund highway construction without raising taxes, getting the majority of the $783.6 million it would raise from Clark County room tax collections now used to market Las Vegas to tourists.
The plan gets $424.2 million from that source and $359.3 million from the live entertainment tax and vehicle sales tax revenues which now go to the state general fund.
Gibbons said the money could be used to bond for $2.5 billion worth of road projects over the next eight years.
“People who live here should not have to shoulder the financial burden for those who are visiting our state,” he said.
He was flanked by a dozen Republican lawmakers. But afterward, they gave the plan a lukewarm reaction.
Democrats were unhappy with the manner in which the proposal was presented, but said room-tax revenues are potentially a valid source since they are paid by the tourists who make up a substantial number of the vehicles crowding Southern Nevada roadways.
The Nevada Resort Association, however, said it would oppose any attempt to raise or reallocate room taxes, pointing out that state and local governments already get more than half the total collected.
Lawmakers are working on how to fund the estimated $3.8 billion shortfall in highway construction funding between now and 2015. Gibbons has rejected proposed tax and fee increases put together by the Blue Ribbon Task Force appointed by his predecessor Kenny Guinn, saying he promised voters he would not raise any tax or fee if elected governor. He repeated that about a dozen times during the 10-minute presentation, simultaneously referring to “their plan” which he said raises taxes by $2 billion over the decade.
Gibbons said he doesn’t propose taking away existing revenues, that his plan would only take a percentage of future increases in those revenue sources.
“We’re not taking the base of the numbers,” he said. “We’re taking from the growth.”
“No one’s going to be happy about having to give up a little portion of their revenue,” he said. But, Gibbons said, the Las Vegas Convention and Visitor’s Authority will get an estimated $2.2 billion over the next eight years and can afford to contribute to fixing the traffic congestion in part created by the tourists they draw to Las Vegas.
Assembly Transportation Chairman Kelvin Atkinson, D-Las Vegas, and Majority Leader John Oceguera, D-Henderson, both described the plan as disappointing.
“It’s disappointing the governor is now releasing a plan with three weeks left in the session,” Atkinson said.
He said the plan isn’t broad based: “He never mentioned the trucking industry. How are they going to participate in this, and how is everybody else who uses the roads?”
Oceguera said he was disappointed at the tone of the governor’s presentation, and that no Democrats were invited to preview the plan or participate.
“We’re trying to work in a collaborative way, trying to get something done here, and he kind of made it us versus them,” he said.
He said, however, the room-tax idea is worth looking at in an effort to spread the cost among all users of the roads and highways.
“Our thing from the very beginning is that everybody has to be part of this,” he said.
While Gibbons referred to the proposal as “the Republican plan,” GOP lawmakers were generally reserved in their responses.
“It’s something to consider,” said Senate Majority Leader Bill Raggio, R-Reno – who did not attend the press conference. “The vehicle sales and entertainment tax reallocation has significant impact on general fund resources so that will have to be reviewed.”
Senate Transportation Chairman Dennis Nolan said the governor’s proposals would be added to the agenda of the legislative working group studying the issue.
Assemblyman Tom Grady, R-Yerington, said he hasn’t had time to absorb the details yet and James Settelmeyer, R-Gardnerville, said “it has potential.”
“I think it’s great he’s come up with an idea,” said Sen. Barbara Cegavske, R-Las Vegas. “We need to look for innovative ways.”
“It looks like a much broader tax would be a better solution,” said Sen. Dean Rhoads, R-Tuscarora.
Nevada Resort Association President Bill Bible said that group, whose members own and operate the vast majority of rooms in Southern Nevada, is “resolutely opposed to raising or reallocating room taxes to pay for transportation improvements.”
Resort association lobbyists pointed out that governmental entities already get 53 percent of total room-tax collections. In 2006, Clark County, Southern Nevada cities, state tourism, the school district and Clark County Transportation received a total of $199.5 million of the total $375.8 million in Clark County room tax money.
That left the convention and visitor’s authority $176.3 million to spend on marketing and promoting Las Vegas.
He said the authority’s efforts have substantially contributed to the economic development of Southern Nevada and that taking more of it could hurt the economy.
“We recognize that these needs must be addressed, but this is not the kind of broad-based approach necessary to correct the problem.”
Bible, who is a former state budget director, former legislative fiscal analyst and former chairman of the Gaming Control Board, also expressed concern about taking parts of the entertainment tax and sales taxes from motor vehicle sales out of the general fund. He said he was concerned the impact that would have on building future state budgets.
• Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.