Northern Nevada county’s troubles increase

Tuesday, Oct. 25, 2005 | 8:41 a.m.

CARSON CITY -- Only budget cuts and tax increases will save White Pine County from falling into insolvency by mid-2006, according to a report by the state Taxation Department.

At a public meeting in Ely on Monday, the department said the county will end up $451,945 in the hole by the end of the fiscal year June 30 unless prompt action is taken.

Among the possible steps suggested to close that budget gap are increases in sales taxes, property taxes and utility fees. An additional tax on residents' vehicles and higher charges for ambulance service and building inspections also were suggested.

After the Nevada Tax Commission on June 27 found a "severe financial emergency" existed in White Pine County, the tax department took over the county's finances. It immediately canceled all credit cards and required that expenditures of more than $250 be approved by the state agency.

A state audit concluded that the county's accounting system had deteriorated so badly that auditors had to basically re-create the county's books to accurately determine White Pine's financial condition.

The county's bookkeeping system cannot accurately provide county commissioners and management "with information on the amount of unreimbursed grant expenditures at any point in time," the audit said.

But an investigation found no evidence of any crime in the shoddy bookkeeping.

The tax department's suggestions on ways that the northeastern Nevada county could put itself back in the black include $381,740 in budget cuts from this year's $7.2 million budget. The cuts could come in areas ranging from the golf course and McGill swimming pool to the sheriff's office.

There also will have to be reductions in staff because 85 percent of the county budget is dedicated to salaries and benefits, the report said.

Options to raise more revenue could include boosting the sales and use tax by one-quarter of 1 percent, the tax department said. Such an increase, which would cost a consumer an additional 25 cents on a $100 purchase, would bring in an extra $76,000 through the remainder of the fiscal year.

The report notes that raising the property tax by 10 cents per $100 value would generate an extra $60,000, while imposing an additional 1 percent on the hotel-motel room tax would pick up $50,000 by June 30.

A 1 percent franchise fee on public utility services, including electric, telephone and cable TV, would produce $250,000 annually, the department said. And the county could collect $85,000 this fiscal year by imposing a 1 percent governmental services tax on residents' vehicles.

The White Pine County Commission would have to enact any tax increase.

When the current fiscal emergency ends, any new taxes could be repealed, the department said.

Cy Ryan can be reached at (775) 687-5032 or at cy@lasvegassun.com.