Next week, registering a vehicle will cost more

By Cy Ryan

Tuesday, Aug. 25, 2009 | 2 a.m.

Owners of the more than 2 million registered vehicles in Nevada will begin paying higher fees next week as another piece of the Legislature’s tax increase takes effect.

“Motorists with older vehicles, in particular, will see an increase in the Governmental Services Tax, as the minimums were raised,” said a news release from the state Department of Motor Vehicles, which collects the tax.

The cost of registration renewals will rise an estimated 10 percent.

For example, the Governmental Services Tax, which is based on the depreciated value of the vehicle, will for a 1-year-old car be levied on 95 percent of the value, up from 85 percent. Vehicles 9 years old and older had been taxed on 5 percent of their value. That will increase to 15 percent and the minimum tax will rise from $6 to $16.

The higher tax, aimed at bridging the state’s budget shortfall, is expected to bring in $42.8 million for the remaining 10 months of the fiscal year and $51.4 million in fiscal 2010.

The tax passed near the end of the session with little controversy. The bill also raised business license fees, the payroll tax and the sales tax to support schools.

Bob Coffin, chairman of the Senate Taxation Committee, called the Governmental Services Tax hike “a mild increase and a small part of the tax package. It did not get people up in arms.”

One reason there was little controversy is “it caught people unaware,” said Carole Vilardo, director of the Nevada Taxpayers Association. “Nobody was sure what was happening. It was kind of fluid.”

A veto by Gov. Jim Gibbons was overridden 17-4 in the Senate and 29-13 in the Assembly.

The increase in the payroll tax, which is expected to yield more than $340 million during the biennium, and the 3 percentage point increase in the hotel-motel room tax, estimated to produce $220 million, have already taken effect.

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The $18.2 billion invested by the state Public Employees Retirement System lost 15.8 percent of its value during the recession, but fared better than 81 percent of government pension funds, officials said last week.

The returns, which were way off the system’s 25-year average of 9 percent, were better than most of such funds because of a more conservative strategy, said Ken Lambert, system investment officer.

During the past three years the return has been a negative 2.1 percent, but that’s better than the minus 3 percent average of other government retirement systems, Lambert told a meeting of the retirement board.

As of June 30 the system had 41 percent invested in U.S. stocks, 30 percent in government bonds, 16 percent in non-U.S. stocks, 5 percent in non-U.S. bonds and 8 percent in private markets.

There are 105,000 state and local government workers and school district employees enrolled in the retirement system, down 1,000 members because government is not hiring, said Dana Bilyeu, executive officer of the system.

The 2009 Legislature raised the public employee retirement contribution rate from 20.5 percent to 21.2 percent of an employee’s salary. The employee and the government split the monthly payment.

For police and firemen, the contribution rate rose from 34.5 percent to 37 percent.

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A state economist predicts Nevada’s job market won’t recover until 2012.

State economist Jered McDonald said the unemployment rate, at 12.5 percent in July, will approach 14 percent in the first or second quarter of 2010 and remain elevated for at least another year before starting to decline.

“We’re looking to 2012 when we start getting new jobs on a year-over-year basis,” he said. “The job losses will begin to decline in 2010 and 2011 and then flatten out near the end of 2011.”

The only strong job markets, McDonald said, are in health care and mining. Mining, however, is not a big contributor to the overall job market, producing only 12,700 jobs in July compared with total private sector employment of 889,500, he said.

McDonald, who presented his forecast to the Green and Renewable Energy Jobs Sector Council last week, also said the opening of CityCenter this year may not create as big a surge in employment as had once been expected.