State stands to lose from Tahoe county, manager warns
MINDEN – Creating a new Lake Tahoe county could have impacts far beyond its parent county’s borders that may not be resolved this legislative session, Douglas County Manager Dan Holler said Wednesday.
Holler discussed the Tahoe Citizens Committee’s impending proposal to make a new county out of the Lake Tahoe Basin areas. If it happened, Douglas County would lose the Stateline casino core, which generates most of its room and gaming taxes.
Even though the Tahoe Citizens Committee has hired a lobbyist and completed preliminary reports saying the idea is feasible, Holler told people attending the Douglas County Republican Women’s luncheon that many big questions still haven’t been answered.
“From my own gut feeling, given the technical issues, I don’t think they’re going to get this through the Legislature in one session,” said Holler. “The issues they’re going to be grappling with are much more far-reaching than just Douglas County.”
Douglas County, said Holler, stands to lose an estimated $3.2 million from its general fund and $2.2 million in room tax money if the proposal succeeds. Lost fees, sales and gaming taxes could bring the total up to $7.1 million, he said.
Residents could be left with hefty property tax increases to make up the loss.
“Basically, you’d see a 30-cent or better increase in property taxes to start offsetting some of that,” Holler said.
By law, property taxes are capped at $3.64 per $100 of assessed value.
A new county could also cost the state motor vehicle taxes, and “the state could be looking at a $6 million gap in their school funding,” Holler said.
Also unaccounted for, said Holler, is how the new county would figure into sales tax allocation. The state redistributes sales taxes, meaning some counties get back more than they contribute. Douglas is one of those “guaranteed” counties, but state law assumes any new county will be a contributing, or “point of origin” county.
State law would have to change if the lake county was guaranteed, and if it was a point of origin, said Holler, “they would not receive the amount of sales tax that they projected in their report.”
Holler is working on a complete analysis of the proposed new county that will explain all potential impacts on Douglas. The Tahoe Citizens Committee is also revising its findings and addressing discrepancies that have been found so far.
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