Fuel taxes and road funding

James Rogers jamesr@best.com
12 Jul 2002 14:30:47 -0700

On Thu, 2002-07-11 at 06:28, Russell Turpin wrote:
> I'm still skeptical. I believe you that the Nevada
> DOT is completely funded from the state's fuel tax.
> But how certain are you that Nevada local governments
> don't pay off road bonds from other sources? Cities
> have much more pavement in them than between them.
> And Nevada, like all states, gets some of its highway
> funds from the federal government.

Nevada gets $200M from the Fed Highway funds. This is a non-trivial
fraction of the budget, though without it Nevada could probably maintain
quality levels comparable to many other states.  The distribution of
funds to cities is undoubtedly complicated.  Counties have the option of
appending their own tax (within defined limits) on top of the state
taxes in addition to the mandatory distribution to the local governments
of around 30% of the state tax.  Unlike heavily urbanized states, Nevada
is mostly highway miles, so urban pavement doesn't make up that much of
the total.  Nevada has little control over where the Federal funds come

I have a very good friend who teaches Political Science and History at
the University of Nevada who a couple years ago told me about an
interesting piece of Nevada history (in the 1980s I believe) regarding
highway funding.  Apparently, during one of the many times the Feds
tried to bludgeon the States into passing legislation by attaching
conditions to the funds, the State legislature decided in principle to
reject the Federal Highway funds rather than capitulate to the new
conditions required to get the funds.  Apparently, a group of people in
the State Assembly had calculated that by rejecting the Federal Highway
Fund conditions and all previous conditions that they had already
accepted, thereby losing the funding, and actually loosening up existing
regulations and laws, that the State of Nevada could recover a
substantial fraction of the lost funds through increased commerce
activity.  There was enough support in the State Assembly to push the
necessary legislation through and make it happen.

The Federal government got wind of this movement and was NOT amused.
They lobbied very hard through the political parties in Washington DC to
undermine the legislative vote in Nevada.  Several assemblymen who had
supported the initial resolution lost their spine and the final passage
failed by a single vote.

-James Rogers