Thursday, July 25, 1996 | 11:59 a.m.
Merging Clark County with the city of Las Vegas would financially cripple other area cities, says county Finance Director Randy Walker.
Outlying cities would lose millions of dollars in tax revenue if the unincorporated county townships became part of Las Vegas, Walker said this week.
"To absorb the unincorporated parts of the county would bankrupt Henderson, North Las Vegas, Boulder City and Mesquite," Walker said.
Henderson would lose the most -- about $7 million under the current distribution formula, Walker said. North Las Vegas would lose $4 million, with Boulder City losing about $900,000 and Mesquite about $250,000.
"It is a fact that Henderson and other cities would lose revenue if the county were to be incorporated by the city of Las Vegas," Henderson City Manager Phil Speight said.
Conversely, if consolidation meant abolishing the city's charter, those cities would see an increase in their coffers, Walker said.
"A lot of things need to be thought through and done before you go through and do something like consolidation," said Walker, who has worked on budgets in the past for the city and Metro Police.
City residents will have a chance Nov. 5 to vote on two questions asking whether the two governments should be merged and taxes equalized throughout the valley.
Mayor Jan Laverty Jones said while the questions are not binding, the responses could send a strong message to state lawmakers who must decide whether to allow government consolidation.
Commissioner Bruce Woodbury said the message would be a lot different if people in the unincorporated county and other cities got to vote on the issue.
"I don't think there's anything been shown by the city of Las Vegas indicating it would be favorable to other incorporated cities in Clark County," Speight said. "In view of the services we're able to provide our residents, we could not show it would be advantageous to consolidate."
Jones, a longtime proponent of consolidation, said combining the two entities would improve government efficiency and reduce taxes in Las Vegas, which has a tax rate 14 percent higher than the urban county areas.
In fact, tax equity seems to be the battle cry among city officials and residents who say it's unfair that their taxes are higher than in the county.
Property taxes for a $120,000 home in Las Vegas run about $1,255 a year, while the same home in the county pays $1,102 a year. The same house in Henderson is somewhere between those two rates.
Jones said consolidation can be achieved without raising taxes in the county, an effort officials on both sides have calculated would cost from $25 million to $30 million to buy down the city's tax rate to match the county's rate.
Coincidentally, a 1993 study by Sacramento, Calif.-based Ernst & Young predicted savings of $24 million with elimination of 375 duplicate jobs throughout the two bureaucracies.
Woodbury said while studies show a cost savings on paper, in reality such savings almost never occur in consolidation.
County officials explained that all cities have the same basic tax rate for countywide services enjoyed by every city, township and rural outpost. The difference in the tax rate occurs where each city sets its rate for providing urban services.
For example, Las Vegas charges 85 cents per $100 of assessed value for urban services such as police and fire protection and government operating expenses while the county charges 45 cents per $100 of assessed value. Henderson's urban services rate is 71 cents, while North Las Vegas charges 97 cents.
The result is the county pays about $413 per person for urban services, while the city pays $579 per person, Walker said.
"We already provide more efficient government services," said County Commission Chairwoman Yvonne Atkinson Gates.
The higher tax rates in other cities are due to policy decisions made by the elected officials of those entities, and as a result city residents enjoy a higher level of service in terms of parks and fire protection, county officials said.
"The city is providing more services in some areas than we are," Woodbury said.
City officials said they spend more on parks and recreation, but are comparable in other urban services. City and county officials concur that the real reason for the disparity in tax rates has its roots in the tax shift of 1981.
"Basically there was no attempt to have equity among the other entities, just a rollback," Walker said.
Las Vegas Finance Director Steve Houchens said the tax shift is part of the problem. He noted that an interim legislative committee has been studying the issue of tax distribution to remedy the inequities.
Houchens agreed with Walker that under the existing distribution formula, Las Vegas would gain to the detriment of other entities, but that would have to be addressed under any consolidation proposal.
"If you went into this consolidation you would probably have some sort of funding requirement that would protect the cities from any real detrimental effect," Houchens said. "I don't think you could do consolidation without some sort of adjustment to the revenue allocation to keep everybody whole."
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