Excise tax on water approved

Jeff Schweers

Tuesday, Dec. 23, 1997 | 10:57 a.m.

Eclipsed by the loud debate over the more controversial quarter-cent sales tax vote before the Clark County Commission last month, a small excise tax on water use was approved with barely a whisper.

The reliability surcharge approved by the County Commission, acting as the Las Vegas Valley Water District board, applies to all bills produced after March 1 and will add pennies a month to residential water bills.

Residential customers will be charged a quarter-percent reliability surcharge, resulting in a 7 to 10 cent increase for the average user at $26 a month, Southern Nevada Water Authority spokeswoman Jeanine Klein said.

All other customers will pay a 2.5 percent excise tax on their total water bill, including service charges, backflow and consumption rate.

Water officials expect the excise tax will generate about $681,000 for the remaining four months of fiscal 1998, and $1.9 million for the fiscal year ending June 30, 1999.

All revenues from the excise tax will be remitted to the Southern Nevada Water Authority to help finance construction of a $3.2 billion water and sewer system expansion needed to accommodate the valley's growth for the next 28 years.

SNWA officials have said the surcharge will cover five percent of the system's expansion costs.

Currently, 79 percent of the system expansion costs come from connection charges and 21 percent comes from regional water rates.

The excise tax was included in AB 291, the quarter-cent sales tax legislation approved by the 1997 Legislature and signed into law in July. The excise tax cannot exceed one-quarter of one percent for residential users and five percent for commercial customers.

The SNWA adopted a resolution in August asking its purveyors to adopt the excise tax. The LVVWD was the first agency to do so, on Nov. 18.

It was the same day the commission came one vote short of the five needed to implement the quarter-cent sales tax increase to help pay for improvements to the Southern Nevada Water System.

Instead, the commission voted to put an advisory question on the 1998 ballot to let voters decide whether they want to pay more at the cash register to offset water rate increases needed to finance system improvements.

Without the quarter-cent sales tax increase, regional water rates are expected to quadruple between now and 2012.