Gibbons’ plan for road construction | NevadaAppeal.com

Gibbons’ plan for road construction

Gov. Jim Gibbons has proposed raising enough money to bond for $2.5 billion in highway projects by taking part of the Clark County room tax. He would also shift part of the live entertainment tax now collected from casino show and lounge rooms to the highway fund, along with part of the sales tax revenue the state gets from car sales.

He emphasized the base amounts now collected from those taxes would not be shifted to the highway fund, only a portion of future growth from those revenues.

The reallocation of entertainment tax and vehicle sales taxes wouldn’t begin until the next biennium, 2009-2010, since making the change now would force more amendments to the proposed state budget.

Live entertainment taxes would bring the state an estimated $12.5 million in fiscal 2008 but ramp up until the state was getting $61.6 million in fiscal 2015. Projections Gibbons said were prepared by the Legislative Counsel Bureau show the entertainment tax would contribute a total of $211.7 million over the next eight fiscal years.

The vehicle tax would generate just $5.7 million in 2008, growing to $46 million in 2015. Altogether, growth in sales taxes from vehicle sales would pump $147.7 million into the highway fund by 2015.

The room tax shift, however, would begin July 1, pumping $8.9 million into the state’s coffers for road construction in fiscal 2008 and $18.7 million the following year.

In fiscal 2015, the state would get an estimated $107 million from Clark County’s room-tax collections. That would bring total room-tax revenues in the highway fund over that period to $424.17 million.

Altogether, that would raise $783.68 million over the next eight years, which is enough to bond for about $2.5 billion in construction.

Gibbons said projections indicate that, even with those amounts being siphoned off for road projects, both state collections from the entertainment and sales taxes as well as the Las Vegas convention authority’s total room tax collections will continue to grow.

He said neither the general fund nor the authority will see revenues decrease.

He emphasized that the room-tax money raised in Clark County would be spent on road projects there, not statewide. He said he will consider similar proposals for both Washoe and for the rural areas of the state to fund projects there.

In addition, Gibbons said he and lawmakers have agreed on an analysis of whether there truly is $3.8 billion in construction needed over the next eight years. Sens. Bill Raggio, Warren Hardy and Bob Beers, all Republicans, also questioned that estimate saying less may be needed.

Other features of the Gibbons plan include studying the feasibility of privately constructed and operated toll roads in some areas and turning over some urban state roads to local governments to maintain.

– By Geoff Dornan