Nevada Law Would Raise State gas Tax if Federal Tax is Cut

LAS VEGAS (AP) - Motorists in Nevada might not see a savings at the pump if Congress approves a gasoline tax holiday touted by two presidential candidates, a state official said.

Nevada has a law to increase fuel taxes to offset any drop in the federal tax, to ensure funding for construction projects and bond funding, said Kent Cooper, Nevada Department of Transportation assistant director of planning.

"It was put in place as protection, should the federal program go away," Cooper said.

Sen. John McCain, R-Ariz., and Sen. Hillary Clinton, D-N.Y., have proposed suspending the 18.4 cents-per-gallon federal tax from Memorial Day to Labor Day as a way to provide relief to motorists facing rising fuel prices.

Nevada state law calls for increasing the state gas tax "equal to the amount by which the federal tax is reduced."

Cooper said some of the $235 million per year that Nevada gets from the U.S. government for road construction projects and maintenance comes from the fuel tax.

Without those funds, he said, the state would be unable to provide services such as repaving, restriping and plowing roads.

The state would also have to cancel construction projects already under way, such as a key Interstate 15 widening project north of downtown Las Vegas, Cooper said. He said canceling projects "costs you a whole bunch of money."

(Copyright 2008 by The Associated Press. All Rights Reserved.)