Tax cap affects county coffers

Stephen Curran

Tuesday, May 17, 2005 | 9:49 a.m.

Clark County agencies expect to have almost $50 million less than originally expected because of the cap on soaring property taxes, but it should have little effect on the roughly $1.3 billion general fund budget unanimously approved Monday.

The County Commission approved the budget 7-0. All commissioners were present for the one-hour hearing.

Property tax revenues -- originally expected to bring in about 27 percent of the $1.09 billion in general fund revenues -- will likely increase at a much lower rate than planned, George Stevens, the county's chief financial officer, said.

The adjusted revenue estimate is still a 7.2 percent increase from the $229.8 in this year's budget and is not expected to seriously affect the $951 million county officials expect to spend from the general fund next year.

Officials will not know exactly how much lower the revenue figures will be until a final assessment is provided by the state Department of Taxation, Stevens said.

The 2006 budget approved Monday includes both the $294.2 million originally expected from property taxes and the $245.3 million adjusted figure.

"It's still a pretty healthy growth in revenue," Stevens said.

The general fund is considered the county's primary operating budget and accounts for 25 percent of the total revenue. Officials expect next year's total budget, which includes the general fund and entitlement programs, will rise to roughly $5 billion, up from $4.4 billion this year, county spokeswoman Stacey Welling said.

Last month the Legislature passed Assembly Bill 489, imposing annual tax caps of 3 percent for homeowners and 8 percent for businesses. Taxes for all other properties will be capped based on a 10-year growth average.

The county plans to spend $173.4 million set aside for improvements in public safety, a 9.8 percent increase from this year's budget. Much of the increase will go toward the 50 new positions approved for public safety agencies at a cost of roughly $4.9 million, County Manager Thom Reilly said.

That $4.9 million that will likely need to rise in coming years as new positions are "phased in" over the next two years to keep pace with rapid growth, he said.

"Even though we're pleased to add as many positions as we did, there are still long-term commitments to be made," Reilly told the commission.

A total of 174 positions were approved at a cost of $11 million, Reilly said. That number is more than double the 69 positions approved in this year's budget and far greater than the four approved the year before.

Hiring had largely been frozen in recent years as the county tightened its belt after the Sept. 11, 2001, terrorist attacks.

Like this year, almost all of those new positions approved for this year went to public safety, criminal justice and child protective services. Last year also saw layoffs of 20 managers, a move Reilly said in May 2004 was needed to free up $2.4 million to hire 40 "frontline" employees.

No such cuts were expected this year, Welling said.

Of this year's general fund revenues, the largest share -- $348.7 million -- is expected to come from sources including fines and forfeits, interest earnings and service charges, according to budget documents. The next largest piece comes from intergovernmental funds, those transferred to the county by other government entities.