Two tax bills are bad news for local governments

Erin Neff

Friday, April 13, 2001 | 11:01 a.m.

CARSON CITY -- Some Southern Nevada governments got a double dose of bad news Thursday as the Assembly Taxation Committee approved two controversial tax bills that would strip millions of dollars from them.

By clearing the committee ahead of Monday's deadline, both Assembly Bill 457 and Assembly Bill 653 are now more than idle threats, and at least one of the measures seems destined for approval.

AB457, sponsored by Bob Beers, R-Las Vegas, and David Goldwater, D-Las Vegas, would shift the share of the motor vehicle privilege tax that local governments now receive over to school districts.

AB653, sponsored by Assembly Speaker Richard Perkins, D-Henderson, would change the distribution formula for consolidated tax revenue in a way that rewards faster-growing cities.

As a result, Henderson would receive a $4 million base adjustment -- paid equally by the city of Las Vegas and Clark County -- and would then bring in more revenue each year based on the new formula.

After the initial $2 million hit, both Las Vegas and Clark County, which are growing at a slower rate, would face future revenue loss.

Only John Marvel, R-Battle Mountain, voted against passing AB653 out of committee. He sided with the testimony the county and city of Las Vegas presented against the bill in a previous hearing.

Perkins made his presence known at the beginning of the committee meeting and should be able to influence the bill's passage in the Assembly, and possibly even in the Senate.

The cities of Henderson, North Las Vegas and Mesquite -- which are growing at the highest rates -- all support the measure.

But all three would lose revenue under AB457.

Goldwater offered an amendment to the bill Thursday creating a two-year sunset period on the bill.

"That is indicating this is a short-term solution to a long-term problem," Goldwater said.

After the initiative petition drive by the teachers union was ruled unconstitutional by the state Supreme Court, educators clamored for the Legislature to impose some type of tax to relieve a crisis in school funding.

Beers said the money shifted to schools would be enough to fund a 2 percent cost-of-living adjustment for teachers in each of the two years.

"Reluctantly, I'm going to support this," said David Parks, D-Las Vegas. "There is no other bill out there that is addressing this issue."

Vivian Freeman, D-Reno, said the bill makes her "uncomfortable" and "appalled that we find ourselves in this mess."

Freeman said Washoe County alone stands to lose $9 million in revenue if the money is shifted. Governmental entities in Clark County would lose $65 million over the two years.

"I'm just not sure they can take the hit," Freeman said.

Freeman, Marvel and Greg Brower, R-Reno, voted against AB457. It still had enough support to clear the committee and now faces a full Assembly vote.

Goldwater pledged both his and Beers' time to local governments to help them find money within their budgets to offset the loss of revenue without cutting essential services or raising property taxes.

The bill - which applies only to the counties of Clark, Washoe, Douglas and Carson City -- tells local governments they can make up the difference by raising property taxes.