A (local) Conversation About Gas Tax

Not Fooling

Happy Spring!  I hope this finds you well as the season of flowers is upon us.  I am sure hoping for some April showers before our dry summer season!

I’ve been wanting to write about Washoe County’s local gas tax for some time now.  And now with the Russian-Ukrainian war, gas prices and taxes are a hot topic.  But that complicates the issue because the more I understand about gas taxes, the more I realize that the national conversation is separate and apart from that which we should be having here in Washoe County. 

So here it goes… When a driver buys at the pump, there is a suite of tax add-ons.  In fact, most of the transportation network in our country is designed to be funded through those taxes.  There are a few problems with this tax structure that carries through to all levels of government. 

The most significant problem is that as our transportation network grows and ages, the gas tax is not as impactful as it once was.  A contributor to this shortfall is vehicles with better fuel efficiency that do not require as much gas as the guzzlers from days gone by.  With the movement toward electric vehicles, some motorists don’t visit the pump at all and drive mostly for free on our nation’s roads. 

Another problem is that relying upon fossil fuels to finance transportation is no longer a viable strategy because fossil fuel reliance is causing climate change conditions.  There is general acceptance that we need to wean society from fossil fuels to manage the planet’s temperature. 

Finding a solution to this funding problem is acknowledged as pressing but also one that needs Washington D.C to fix first and then states will follow suit with their respective tax add-ons.  In response to the recent escalation in gas prices, some Congress members and governors have sought to soften the blow with tax relief. 

For the local context, in 2008 Washoe County voters agreed to increase gas taxes annually in accordance with an adopted cost-of-living index.  This increase will not expire.  This is advantageous to funding transportation needs (unlike the federal tax that is stagnant at 18.4 cents per gallon since 1997).  But now our Washoe County tax rate is far out of whack.  It now exceeds both the federal and state rates combined.  And the public policy question I have been raising for years is, how high are we going to go with this local fuel tax?  Hopefully, now the time is ripe for the conversation.

This question is poignant as our Governor was an elected local leader instrumental in getting a local gas tax in Clark County.  That tax escalated for only 10 years!  Compare that to the Washoe County tax that will never sunsets. Unlike other governors, he does not have the authority to grant holidays.

My research into this topic indicates that not many states have local add-ons to the state gas tax rate so there are not many comparative examples to help evaluate the Washoe County situation.  It has, however, led me to develop a bias against indexed taxes and fees, that adjust according to inflation and other factors.

I believe that politicians need to be taken to the task of setting these periodically and not letting them be on autopilot.  Rate hikes need to be calibrated and aligned to planned infrastructure needs that go through public adoption processes. 

Truckee Meadows Water Authority (TMWA) does a great job at this with 5-year planning horizons for rates.  Reno with its sewer fund, not so much.  While indexed sewer rates allow for a reliable steady revenue stream, it has led to an overreliance on rates versus requiring new development to pay a fair share.  It has also led to fuzzy infrastructure project planning because there is no need to justify projects as tied to rate changes.

Finally, I am not sure that we are getting our money’s worth from our transportation taxes.  The fuel tax money is biased against local road needs in favor of new ones and widenings.  This is why as a Councilmember; I often field calls from residents concerned about deteriorating neighborhood streets.  The unfortunate bus strike of this past summer and transit service reductions are additional examples.  But worse of all, we are seeing too many deaths and serious injuries out on our roads, and we need to shift over to a safety mindset as a guiding road design principle. 

I understand that the Washoe County Commission upon recommendation from the Regional Transportation Commission must approve the fuel indexing on an annual basis. I am calling upon them to not hike it this year and together with the cities of Reno and Sparks, to re-engineer an automatic escalation formula.  We need a new approach that takes gas taxes off autopilot and advocates for other government levels that a framework is developed soon that has all drivers paying a fair share. 

Jenny Brekhus is the Ward 1 Reno, NV, City Council Member.  When this newsletter expresses opinions and views without other attribution, they are her own. They do not reflect official views or positions of the City of Reno or the Reno City Council unless otherwise noted.   This publication and any response it generates communicated through any channel may be subject to disclosure under Nevada Public Records Act if it substantively refers to City of Reno business.