Bill could cost city $1.5 million

Diana Sahagun

Tuesday, June 12, 2001 | 10:20 a.m.

The city could be facing a $1.5 million budget shortfall in the upcoming fiscal year after lawmakers approved a bill that changes the way the state distributes revenue from taxes.

A handful of bills that will affect the city were approved during the the three-month session, but the most controversial, Assembly Bill 653, was approved after midnight -- the session was extended to reflect the hour difference between Pacific Daylight Time and Pacific Standard Time -- on the last day. Gov. Kenny Guinn is expected to sign the bill -- along with 22 others approved by the Legislature June 4 -- Thursday after legislators are given an opportunity to pass them again in a special session.

The bill, sponsored by Assembly Speaker Richard Perkins, D-Henderson, changes the distribution for consolidated tax revenue to reward cities experiencing rapid growth -- cities like North Las Vegas and Henderson.

In addition to the $1.5 million hit in the coming fiscal year, which begins July 1, officials predict the city will lose $2 million in fiscal 2002-03.

There is still some question whether the changes would go into effect July 1 or the following fiscal year, said Deputy City Manager Steven Houchens.

City Finance Director Mark Vincent planned for a $3 million shortfall for the fiscal year beginning July 1; the city budget was approved last month by the City Council.

Although the city will still fall short $1.5 million, not the expected $3 million, Vincent said he's not making plans for the money yet.

Vincent said he remains nervous about the economy, especially because of a decline sales taxes, a major source of revenue. If the growth rate from sales tax continues to hover around 3 percent, as it has the past three months, Vincent said the city would need every penny of that savings just to break even.

"I'm not too quick to say this is good news, and (that) we have more money to spend," Vincent said.

Vincent and Houchens said AB653 is fair, because it provides the $4 million sought by Henderson. The money would be collected from all entities in Clark County, including North Las Vegas and Mesquite, which were not part of the original proposal.

Mayor Oscar Goodman, who, with the city's lobbyists, fought the measure in Carson City, said the bill was a compromise, but it still was not what the city wanted.

"It's better than what we were expecting, but we still would rather have had to give zero," he said.

Several were passed that benefit Las Vegas and are awaiting the governor's signature: