Gibbons has road revenue plan

CARSON CITY -- Flanked by Republican legislators, Gov. Jim Gibbons announced his plan Thursday to raise $2.5 billion for highway construction by reallocating existing room, sales and live entertainment taxes.

Gibbons repeatedly emphasized in an announcement ceremony in front of the state Capitol that his plan would solve the highway construction fund shortfall without an increase in taxes, while a Democratic plan calls for $2 billion in tax increases.

"When I ran for governor of this great state, I promised Nevadans I would not raise taxes," he said. "Nevadans expect me to keep that promise, and I intend to do just that.

"We want you to compare. Remember their plan is $2 billion in tax increases. Our plan is zero tax increases, and it solves the problem."

But the governor's proposal drew immediate opposition from some Democrats, the Las Vegas Convention and Visitors Authority, which could see its convention center expansion scuttled by the plan, and the Nevada Resort Association.

Under Gibbons' plan, the state highway fund would receive $424 million over the next eight years from room taxes now going to the Las Vegas Convention and Visitors Authority, along with $148 million in sales tax from vehicle sales and $212 million in live entertainment taxes now sent to the state general fund.

Using that revenue, the state Transportation Department could sell $2.5 billion in bonds and begin work on highway construction projects. The tax reallocation plan would remain in effect at least as long as it takes to pay off the bonds, according to state Budget Director Andrew Clinger.

Assembly Majority Leader John Oceguera, D-Las Vegas, and Assembly Transportation Chairman Kelvin Atkinson, D-North Las Vegas, accused Gibbons of picking an unnecessary battle with Democrats.

Several times during his announcement, Gibbons motioned toward the Legislative Building and noted Democrats want to raise taxes, while he's opposed to raising taxes.

"I thought it was 'one Nevada,' " Oceguera said, referring to one of the governor's early themes. "I thought we were working together on this problem."

Oceguera, who watched the announcement with others in the crowd, said Democrats were not invited to transportation strategy sessions with the governor. Oceguera said he learned of the Gibbons proposal as it was presented to the audience.

Atkinson said Gibbons' plan does not include enough revenue to cover an estimated $3.8 billion highway construction shortfall.

A state transportation task force recommended last year that the Legislature approve $3.8 billion in tax increases and modifications so the Nevada Department of Transportation could begin working on 10 major highway projects, including seven in Clark County. Much of the money would be spent widening Interstate 15 and U.S. Highway 95.

After Gibbons' announcement, Transportation Director Susan Martinovich said because of inflation the cost of the highway construction projects outlined by the task force now is closer to $5 billion. The additional revenue might come through public-private partnerships, including toll roads, she said.

Atkinson said of Gibbons' plan: "It takes money from the general fund; it takes money from education."

Gibbons' plan would begin taking revenue from the general fund in the 2009-11 budget period. The amount reallocated to transportation would be $50 million in that budget, and increase to nearly $200 million in the 2013-15 budget.

Gibbons gave no indication where general fund spending would be trimmed, though no decision would be made until the 2009 legislative session.

Atkinson said Democrats will consider Gibbons' proposals along with other plans to raise highway construction money. With their 27-15 majority in the Assembly, Democrats can kill any proposal by Gibbons.

Gibbons, in turn, could veto any Democratic plan.

So far, Democrats have only announced publicly proposals to assess a 15-cent per mile weight-distance tax on trucks and require car rental companies to give the state half of a tax they already collect from customers.

Assembly Minority Leader Garn Mabey stood with Gibbons on the podium, but in an interview he offered only tepid support for the plan.

"My hope is it will encourage the debate," Mabey said. "Parts of it can be supported; parts of it won't. Other peoples' ideas will become part of it."

The Legislature is scheduled to adjourn June 4, but has been forced into special sessions to complete business three of the last four sessions.

Gibbons' plan to tap the room tax prompted the board of directors of the Las Vegas Convention and Visitors Authority to vote 12-0 Wednesday against any plan to take its revenue. The convention authority, which promotes Southern Nevada tourism, is funded by the room tax.

The Nevada Resort Association also opposes Gibbons' proposal to take room tax revenue from the convention authority.

"We are resolutely opposed to raising or reallocating room taxes to pay for transportation improvements in Clark County as proposed by the governor today," NRA President Bill Bible said.

In a news release, the convention authority said it has begun a $890 million renovation of its convention center financed through long-term bonds repaid by future room tax revenue growth.

Mabey acknowledged that it will be difficult for some legislators to back the Gibbons plan because of the gaming industry's opposition.

Gibbons said, however, that room tax revenue for the convention authority still would increase under his plan. But the increase would be minimal. His estimates show the convention authority would receive $225 million in room tax revenue in 2010-11, growing to $227 million in 2014-15.

The governor said he was not trying to punish the convention authority, but the agency has done such a "great job" that it has contributed to the congestion problem, he said.

Between 45,000 and 75,000 additional hotel rooms will be constructed in Las Vegas in the next decade, he said. Each room adds 2.3 cars to the community, he said.

"Some people cannot even get from their hotel to the airport in a timely manner," Gibbons said. "Sooner or later, folks, they will stop coming."

In response to reporters' questions, Gibbons said he discussed the proposal with gaming executives and some were supportive of the plan. He refused to identify those officials.

Sources said earlier that Gibbons' proposal was developed in meetings with executives from The Venetian, the only major Las Vegas hotel that is not a member of the Nevada Resort Association. Its chairman, Sheldon Adelson, has been critical of convention authority spending. The Venetian has its own convention center.

Vince Alberta, a convention authority spokesman, said his agency would have to cancel the center's renovation if Gibbons' plan is approved. Gibbons is proposing a "flat" budget for the LVCVA that would not provide enough money to pay bond service costs on the renovation project.

Las Vegas Mayor Oscar Goodman, the convention authority's chairman, said cancelling the convention center project would cost the convention authority $20 billion in business through 2024.

"While this might leave Chicago, New York and Orlando celebrating the opportunity to gain our business, it would be to the valley's overall detriment," Goodman said. "The adage of, 'If it ain't broke, don't fix it,' has never been more true."

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