PAIN RELIEF
BEERS PROPOSES TWO-MONTH GAS TAX SUSPENSION
BY MIKE ZIGLER

State Sen. Bob Beers doesn’t like to take from taxpayers. In fact, he has a tendency to give money back. There was the effort in 2003 to prevent a record increase in state revenue. Bob led the way. And the rebate that Nevadans will soon receive from the DMV — that was Bob’s idea.

Now he’s got another plan. As gas prices continue to skyrocket thanks to the natural disaster that hit America’s Gulf Coast, Beers (R-Las Vegas) proposes to eliminate the state gas tax of 17.65 cents per gallon for two months. The overall total that this would save Nevadans is $42.5 million, he said.

State gas taxes fund road construction projects and the DMV. Should a suspension of the tax occur, these areas would continue to receive funding through the rainy day fund, which currently has about $158 million in it.

“I’d like to see the rainy day fund dollars — that we’re currently using to rebuild that fund — be used for what gas taxes normally pay because I think this is a rainy day,” Beers explained during a conference call.

Beers proposed the idea to Gov. Kenny Guinn early this month. Unless Guinn can handle the matter through an executive order, Beers wants to see him call a special session. The governor’s office told Beers that they would consider the idea.

“The governor’s office is looking at this amongst the other things they are doing to deal with Hurricane Katrina’s aftermath,” said Beers, a candidate for governor.

While gas prices have jumped 30 percent since Hurricane Katrina, the public has been infuriated with rising gas prices for about two years now. Most outrage targets big oil companies as price gouging is continually speculated.

But a recent report showed that Exxon Mobil only had a net profit of about 25 cents per gallon, less than 8 cents more than what the state of Nevada rakes in. In total, state and local taxes make up 52 cents a gallon in many parts of Nevada, more than double what Exxon Mobil recently profited per gallon.

Nevada collects $255.6 million a year in state gas taxes, which comes to an average of $21.3 million a month. Beers’ plan may save an immediate dollar, but hopefully it also causes the public to realize that the government plays just as much of a role in financial pains at the pumps.

“As I cast about in my head for some solutions, this struck me as one of the best for Nevada families, businesses and even visitors,” Beers said. “There’s not much the state can do about the oil company price structure, but we can do something about our own.”

While this may be a short-term solution, what happens if gas prices have not dropped in two months? Beers said there are two options — taxpayers can just be thankful they received two months worth of cheaper gas, or the state can look to reduce its gas tax permanently.

“We could look at a permanent partial reduction of the gas tax in a dollar amount equivalent to our ongoing funding of the rainy day fund,” Beers said. “The cost of that decision would be we’d end up with no rainy day fund. Hopefully we are seeing a shortterm spike by the uncertainty of what’s happening along the Gulf Coast. Regardless, we’ve got to get some relief for Nevadans.”

Gas prices have soared above $3 a gallon all across Nevada. During a Labor Day weekend trip, Beers noted one station in Lovelock that asked drivers for $3.89 a gallon for premium fuel.

“I figured it was either a typo or the gas station was closed and the guy next door put that up in order to drive more business to his gas station,” Beers said.

With summer complete, travel will naturally decrease. Ideally, that means relief may come from a decline in demand, making a state gas tax suspension even more appealing.

“The biggest months for gas tax generation are the summer vacation months,” Beers explained. “So gas tax proceeds may be a little lower in the coming months anyway. As well, we have seen the last couple months of revenue coming in amounts greater than our projections, meaning there are a few dollars in the account that we could use to smooth over any cash-flow problems.”

Nevada hosts the third highest gas prices in the country, behind Hawaii and California. But earlier this month, more than 30 states had steeper prices because of their reliance on East Coast refineries affected by Katrina. Even though Nevada’s rates are comparatively and currently lower in the national picture, if gas from California heads to eastern areas, then that could drive Nevada’s prices up even higher. LW