Gibson: Growth penalized in tax funding formula

Jeffrey Libby

Tuesday, Jan. 15, 2002 | 9:49 a.m.

Henderson Mayor Jim Gibson said his city of golf courses and tree-lined parks will embrace new growth only after legislators enact state tax funding formulas that allow cities to maintain services to keep pace with explosive growth.

"Through recent struggles with the consolidated tax formula we've come to recognize that we are wards of the state," Gibson said in his third State of the City address given Monday at a lunch attended by about 400 people at the Hyatt Regency in Lake Las Vegas. "We can be independent to an extent, but at the end of the day, it's the tax distribution that comes from Carson City that gives us the ability to operate."

Henderson officials have delayed a scheduled May auction of 6,200 federally owned acres in southwest Henderson. The delay of at least 18 months gives them time to weigh the impact of any changes in tax funding formulas before cutting deals with developers.

After the Legislature in 1997 changed tax distribution formulas, growth has been "penalized," Gibson said. Even with a gain of $4.3 million in the 2001 session, Gibson said his city still can't make growth pay for growth without sacrificing quality of life.

"Today, our share of these revenues no longer supports the provision of quality public services in new growth areas," Gibson said.

But he predicted that the studies of the tax formula "will demonstrate that growth is important" to the state's prosperity and that legislators will approve changes favorable to growing cities.

"Only then will we be willing to move forward," he said.

After the address, Gov. Kenny Guinn, Las Vegas Mayor Oscar Goodman and state Sen. Ann O'Connell, R-Las Vegas, expressed varying degrees of support for Henderson's position in what could become a contentious battle for limited funds during the 2003 Legislature.

Sen. Majority Leader Bill Raggio, R-Reno, reached by phone, provided the only hint of competing needs elsewhere in the state.

Gibson also said Guinn "has indicated that he doesn't intend to solve the problems of the state by loading the burden on the backs of cities."

During the 2001 legislative session, several bills gained backing that would have diverted revenues, which traditionally have been passed on to the cities, back to the state.

When asked about Gibson's claim for a larger share of state revenues, Guinn said, "He's right on the mark, asking for that."

But at the same time, Guinn said, "No formula could ever be put together that could provide equal distribution of money with the phenomenal growth we've seen in the valley."

Goodman promised that there would be no repeat of the fight last summer between representatives of Clark County, Las Vegas and Henderson. Henderson's $4.3 million gain came largely at the expense of Clark County and Las Vegas.

The state distributes sales tax revenues among counties based on a variety of complex formulas. Counties and cities complement that money with property taxes, but remain largely dependent on sales tax revenues.

"I met last week with Mayor Gibson and mayors throughout the state, and we promised a united fight to maintain revenues and to provide the types of services we're looked on to provide," Goodman said. "You're not going to see a fight like that again."

O'Connell said what was good for Henderson would be good for all communities. The ongoing adjustments of the tax formula since 1981 have always been done in an effort to balance revenues between thriving communities and communities that generate very little sales tax revenue, she said.

Raggio was less expansive.

"The state as a whole isn't just one section. Some people have trouble remembering that," he said. "There may be growth in Southern Nevada and needs associated with that growth, but you can't just forget one part of the state."