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

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:

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• 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.