Gibson urges Southern tax unity

Jeffrey Libby

Thursday, Oct. 4, 2001 | 9:55 a.m.

Henderson Mayor Jim Gibson is calling upon Southern Nevada leaders to band together and demand a fundamental shift in the way the state shares tax money with local governments.

Gibson says nothing less than the economic well-being of Southern Nevada is at stake.

The mayor wants all local governments at the same table, including representatives of the Regional Planning Coalition. If Southern Nevada's leaders do not speak out and win a greater share of funding, Gibson says, the local economies will suffer from growth instead of reaping benefits.

During the 2001 Legislature, which ended June 5, Henderson achieved success in obtaining an extra $4.4 million in tax money annually. This extra revenue, which mainly came out of the pockets of Clark County and the city of Las Vegas, was gained only after a fight among the Southern Nevada municipalities.

Now, Gibson is saying the battle must be fought again, although this time the municipalities must be united. He says the state formula for distributing tax revenue is shortchanging all of Southern Nevada.

"A stark reality (that rapid growth cannot be sustained through tax money) faces us in Henderson that has got to be faced, or is going to be faced, by everyone," Gibson said Wednesday after a special City Council meeting.

"We need to sit down with all the local governments. The Regional Planning Coalition needs to be involved. And for the first time ever that I think I've said this, we need a state representative at the table.

"We've never done a good job helping state government fully appreciate what happens at the local level," Gibson said.

The mayor maintains that if the city grows much faster than 6 percent a year, the costs of providing services outstrips the resultant gain in tax revenue. Over the past decade, Henderson has been growing at about 12-14 percent a year.

On Tuesday, Assistant City Manager Bonnie Rinaldi recommended that the Henderson City Council delay auction of 1,500 acres in southwest Henderson, which were annexed in 2000 from the Bureau of Land Management to make way for long-term growth.

Rinaldi said that although a six-month marketing study recommends building more residential communities like Green Valley and Green Valley Ranch, if the city develops the land under current state tax structures, it would be a losing proposition. In a phrase, the growth could not pay for itself.

North Las Vegas, which in May auctioned 1,900 acres to developers, may find itself also incurring massive deficits due to those tax structures, Gibson said.

But if Henderson puts off its auction, Gibson said, that dip in expected growth could further soften an already-flagging economy. "There needs to be a larger discussion whether it's really worth what might happen if North Las Vegas and Henderson are driven to grow more slowly," Gibson said. "I'm worried about the Southern Nevada economy."

Henderson, North Las Vegas and Mesquite have experienced some of the fastest growth in the nation during the past decade. That growth has played a large role in fueling the economy, Gibson said.

But since 1997, and even as early as 1981, changes in tax codes have curbed economic incentives for rapid growth, City Manager Phil Speight said. From 1997 to 2001, Henderson lost about $24 million in state revenues because of those changes, Speight said.

And although Henderson's legislative victory this spring allowed officials to "stop the hemorrhaging," Speight said Wednesday that if the new formula had been in place since 1997, Henderson still would have lost $17 million in state revenues by this year.

But Henderson isn't the only loser when it comes to earning a fair and equitable share of the state tax revenue pie, Steve Hanson, city finance director said.

The fight this spring -- pitting the faster-growing cities of Henderson, North Las Vegas and Mesquite against the more mature municipalities of Las Vegas and Clark County -- "was a smokescreen to a more serious problem," Hanson said.

Clark County's growth as a region continues to outpace any increased share of the state tax pie, Hanson said.

So if anyone in Southern Nevada is to win, the logic goes, the battle needs to be fought at the state level.

State Sen. Ann O'Connell, R-Las Vegas, who attended the Wednesday meeting, said the discussion Gibson wants has been ongoing for two years.

"Taxes are going to be a major issue this session (in 2003)," O'Connell said. "I hope we're not looking at new taxes, but a reallocation of taxes."

To Gibson though, that kind of rhetoric can only mean one thing: further hits to local revenues.

"The state says it's being shortchanged right now," Gibson said. "So where is that reallocation going to come from?"

Gibson has not yet contacted other local government leaders to discuss a time to meet, but he said the discussions need to happen long before the 2003 legislature convenes.