RTC #5

Shall the Washoe County Board of Commissioners seek state legislation for the Regional Transportation Commission (RTC) to obtain necessary additional funding for transportation projects that will reduce traffic congestion, improve air quality, and repair and maintain roads in the Truckee Meadows?

Explanation:  This is an advisory question only.  Results may be taken to the Nevada Legislation for further action.
Regional experts predict that population growth in Washoe County will reach more than 600,000 residents by the year 2030.  With this predicted growth, our community will see an increase in traffic congestion, decreasing air quality and increased road repair and maintenance projects.  In December 2007, the RTC Board approved an immediate 50% increase in the fees paid by new development for needed congestion improvements.  In May 2008, the RTC acted to increase developer fees another 130% above the pre-December 2007 rates, to be phased in over five years.  These steps insure that development will continue to pay its full legal share for congestion relief.  Even with these actions, transportation is facing a funding shortfall of approximately $5 billion through 2040.  Nearly 60% of this shortfall is due to inflation in street and highway construction, which is eroding the purchasing power of our existing gas and diesel taxes.  In order to maintain the quality of life we enjoy in the Truckee Meadows, additional funding is necessary to:
... Maintain and repair existing and future streets and highways
... Expand streets and highways
... Reduce traffic congestion
... Maintain air quality
As a first step in solving this problem, a committee of 30 prominent community leaders recommended a funding package that would recover the purchasing power lost by existing federal, state and local gas and diesel taxes due to inflation in highway construction costs.  This would be done by making adjustments to fuel tax rates, sometimes called indexing, based upon changes in the Producer Price Index for Street and Highway Construction.  If there is no inflation in highway construction costs, there would be no changes in the fuel tax rates.  Federal and state fuel taxes, which have not been adjusted for 15 years, have lost of 30% their purchasing power since 2003 due to inflation.  In 2003, voters approved indexing local gas taxes to the Consumer Price Index (CPI) but experts say CPI has not accurately reflected the increases in highway construction costs, resulting in a 20% loss of purchasing power since 2003.  This package would spread the responsibility among users of the roads including businesses, residents and tourists. The Regional Transportation Commission may ask the legislature to:
....Adjust the diesel and gas tax rates in Washoe County based upon the rate of street and highway construction inflation to recover lost purchasing power on our local, state and federal diesel and gas tax revenues.

A "yes" vote would advise the Nevada Legislature that you approve of the recommendation to protect existing diesel and gas taxes from inflation.

A "no" vote would advise the Nevada Legislature that you do not approve of recommendation to protect existing diesel and gas taxes from inflation.
This question is advisory in nature and does not place any legal requirement on the governing body, any member of the governing body, any officer of the political subdivision or the Nevada Legislature.

Argument "In Favor" of RTC #5

A YES vote on RTC-5 protects our quality of life and will save time and money.
Good transportation is fundamental to a vibrant economy -- short, safe commutes; clean air; and more time with our families. These things we value are threatened by growing traffic congestion, deteriorating roads, pollution, and accidents, because current road funding will be $5 billion short over the next 30 years.  Without action, average per person traffic delay could soar from the 2.1 minutes experienced in 2000 to 46 minutes by 2040.

Many factors contribute to this problem: inaction by federal and state governments, growth in both total and per person travel, improved fuel economy, and above all, inflation in construction costs.
When we consider funding from state and federal sources, we have not increased fuel taxes in more than 15 years.
 
In the last 5 years alone, inflation has destroyed nearly one-third of the purchasing power of each federal or state fuel tax dollar. An astounding 60% of the projected $5 billion shortfall is caused by inflationary erosion.

As a first step in a long-term solution, adjusting gas and diesel tax rates (indexing) to make up for inflation makes sense.  If there is no inflation, there will be no increase in the tax rate.  Based upon historic rates of construction inflation, the price of a gallon of gasoline might increase by 2 cents per gallon and diesel by 2.4 cents beginning in FY 2010, costing the average non-commercial driver about 3.6 cents a day, $13 a year.  The cost for commercial diesel trucks would increase by about 1.1 cents per mile.  Annual incremental adjustment would continue to be made but only to cover inflationary losses.
The economic benefits would be positive creating thousands of well-paying jobs and in the near term injecting $250 million into the economy. Every penny collected would be spent in Washoe County. Important congestion relief projects needed now but unfunded could be started; mounting traffic delays could be slowed saving thousands of gallons of gasoline and avoiding tons of pollution and regional economic competitiveness.

Vote YES for our quality of life!

Rebuttal to Argument "In Favor" of RTC #5

In 2002 Washoe County voters approved a tax increase (WC-2) for an estimated $820,000,000.00 shortfall in road construction/maintenance revenue. RTC is now asking Washoe County voters to approve additional tax increases for an estimated $5,000,000,000.00 revenue shortfall.

Washoe County currently reports a population of 380,000 (www.co.washoe.nv.us/index/about.html). Using RTC's figures in their own argument, $5,000,000,000.00 in revenue shortfall equates to $13,150.00 for every man, woman and child in Washoe County, regardless of whether or not they drive. Inflation never reverses itself and this tax burden will only increase over time with the size of the shortfall.

Government inaction is a large factor, choosing to spend tax revenues in other areas and other programs. Options are available other than this tax plan in RTC-5. Eliminating inflationary government regulations and red tape, and opening construction/maintenance bids to all qualified contractors will result in major cost savings, allowing those wasted revenue dollars to be spent on more construction miles.

High paying jobs should be established by private businesses; not mandated by government and funded by taxes on Washoe County residents.

Vote "NO" on RTC-5 to tell Washoe County governments to eliminate waste and provide essential services without raising taxes on Washoe County residents.

Argument "In Opposition" to RTC #5

A "NO" vote is recommended on RTC-5 to prevent implementing a fuel tax index to
automatically increase tax revenue for street and highway maintenance and construction.
Fuel tax indexing would automatically increase the fuel tax equal to the amount of
purchasing power decrease in highway funding, in road building materials and in
maintenance costs. There is no limit on this tax index, and it will be subject to foreign
and domestic cost influences.

Nevadans currently pay over 50 cents per gallon fuel tax. Volatile fuel prices have
already driven up the cost of food, medicine, clothing, utilities, school supplies, etc, and
an automatic fuel tax index will add significantly to the burden of high energy costs. If
approved, this fuel tax increase will most likely be a permanent tax on all residents, goods and services in Washoe County.

The revenue derived from RTC-5 is general in its application rather than designating the
revenues to specific roadways such as the Tahoe-Pyramid Expressway. This question
does not assure specific projects will be undertaken or completed by the RTC. This
advisory question, if passed, would go to the legislature where changes can be made,
including increasing the percentage of tax.

The RTC figures show a 30% decrease in purchasing power in the last 5 years. Recent
government statistics report nearly 10% real inflation already this year alone. With
soaring fuel costs, Americans are driving significantly fewer miles which has resulted in
lower fuel tax revenues. This proposed automatic fuel tax index could be used to make up
not only those revenues lost by declining purchasing power, but also those revenues lost
by fewer miles driven.

The RTC's statement of financial effect is based on a faulty calculation of an average
driver using less than 2 gallons of fuel per day to report the minimal impact figures they
use. Likewise, disputed population estimates are used to calculate traffic impact and
future growth.

With increasing unemployment, high foreclosure rates, and a rapidly increasing cost of
living, Washoe County residents do not need the burden of this automatic tax. 

Rebuttal to Argument "In Opposition" to RTC #5 

Failure to address our roads and highways would have great economic and quality of life impacts. It would cost our community time and money while placing driver safety peril.
 
Without action, average per person traffic delay could soar from the 2.1 minutes experienced in 2000 to 31 minutes in the next 10 years. Every minute of delay costs nearly 15-cents -- a little more for businesses which rely on the road system, according to state and local economic research.  Indexing fuel taxes to construction inflation is a small, but prudent investment. It is also a way to cope with the volatile world economy and stay competitive, while stimulating the local economy through construction employment.
Without this measure, the community will see an increase in traffic congestion, vehicle accidents, decreasing air quality and worse pavements if flat gas taxes keep losing ground to inflation.

The revenue derived from this measure would go to specific projects determined by public input and most recently a Blue Ribbon Committee of community and business leaders. Projects such as a new Pyramid and McCarran interchange, widening McCarran in Northwest Reno and a new Meadowood Way interchange would be targeted with this measure.

Statement of financial effect:  Gas and diesel fuel tax rates would be adjusted annually to offset only the amount of purchasing power lost due to inflation of street and highway construction costs; if there is no inflation in street and highway construction costs, there would be no adjustment to the tax rates and no impact to the tax payer.  Based upon historic inflation rates of street and highway construction, this measure would increase the tax paid on a gallon of gasoline approximately 2 cents per gallon and increase the tax paid on a gallon of diesel fuel approximately 2.4 cents per gallon in the first year of implementation (FY 2010).  In the first year of implementation, this would cost the average driver of a gas vehicle or non-commercial diesel vehicle an additional 3.6 cents per day.  For operators of commercial diesel vehicles, this would increase the cost for each mile driven by an estimated 5/10 of one cent.
The inflation recovery taxes would remain in effect until such time as specific action is taken by the Washoe County Commission to amend or repeal them.
If this measure is passed, the Regional Transportation Commission (RTC) may sell bonds payable from the tax that are backed by the full faith and credit of the Commission.  Following the levy of the tax, additional expenses are expected to be incurred for the operation and maintenance of the road improvements constructed with this additional tax, which will paid for by the tax or from existing RTC and local government resources.