FUNDING: Nevada debates vehicle-miles tax with $38 million gas tax drop looming

State transportation board raises questions of interstate operation, constitutionality

August 13, 2013

The Nevada Department of Transportation (NDOT) warned members of the Nevada Board of Transportation in a presentation on Monday that the state faces a $38 million shortfall in gas tax revenue through 2017, and advocated for a mileage-based user fee.


NDOT’s study indicated that gas tax revenues will continue to decline as more fuel-efficient and alternative-fuel vehicles hit the roads. By 2017, the department said that total gas tax revenues could decrease by as much $38 million, revealing a pressing need for another funding source.


According to NDOT, a device could be placed in a vehicle to track mileage, and the usage fee could then be collected at the gas pump or after a three-month period.


Several board members expressed concerns about charging motorists for miles driven rather than fuel itself. Among the questions raised were:


  • Whether Nevada residents could or would be charged for driving in other states;

  • How would Nevada coordinate with other states to make the system work;

  • The constitutionality of the switch from gas taxes to a vehicle mileage fee

Other states have been exploring the concept of a mileage-based user fee. Oregon, in fact, became the first state to pass legislation implementing such a system earlier this year. Under the provisions of the bill, the vehicles miles tax would have to be in place by July 1, 2015.