Utilities win tax cuts some fear will harm counties, schools

Tuesday, March 24, 1998 | 11:40 a.m.

The state Board of Equalization chopped the assessed tax values of Nevada Power by $43.1 million and Southwest Gas by $22.4 million. The assessed value is about 35 percent of market value.

The cuts, approved Monday, reduce the property taxes that Nevada Power will pay in the coming fiscal year by $1.3 million and taxes paid by Southwest Gas by $660,000.

Southern California Edison's taxes were reduced by $52,556, while Idaho Power Co. will pay $93,000 less.

Sprint is seeking a $1.4 million tax reduction, while AT&T wants a $682,000 decrease in property taxes.

Robert Hadfield, executive director of the Nevada Association of Counties, said the reductions will ravage budgets in Lincoln, Mineral, White Pine and other small counties and school districts.

Hadfield said some rural counties already charge the maximum tax rate of $3.64 per $100 of assessed value, and can do little to make up lost revenue until the Legislature goes into session next year.

"There is no way they can respond to what is happening," Hadfield said. "The timing of this is terrible."

With the deregulation of electrical utilities in Nevada next year, state Taxation Director Michael Pitlock said companies like Nevada Power are hurrying to obtain lower property taxes.

As a regulated monopoly, utilities paid property taxes and passed the cost to customers. But Pitlock said utilities must reduce costs to be more competitive now that other companies are seeking their customers.

Even with the reductions, Nevada Power will pay $18.1 million in property taxes in the coming year. Southwest Gas will pay $4.1 million and Southern California Edison, $2.3 million.

Under state law, Pitlock's Taxation Department assesses the value of major utilities, airlines and telecommunications companies whose lines and facilities cross county lines.

The assessed values of utilities located solely within one county are not assessed by the state, but by the county assessor's office.