TCC wants fair tax plan
All local governments should be treated equally in the eyes of the state and no special districts should lose money under the proposed new formula for tax distribution, according to the Tahoe Citizens Committee.
The group to form a new county at Lake Tahoe has taken a position on SB 254 – a bill making its way through the Nevada Legislature that would consolidate the way taxes are distributed within counties.
The new formula allocates sales tax revenues largely based on the Consumer Price Index percentage, with any leftovers going to areas experiencing assessed valuation and population growth. The old formula was based almost entirely on assessed valuation.
State-subsidized enterprise districts – entities that perform one specific function such as water or sewer service – are frozen, and would therefore be eliminated from any CPI increase.
Kelly Krolicki, TCC executive coordinator, said the group does not think individual governments, including enterprise districts, should take a hit on budgets they are used to receiving from the state.
For example, the Tahoe-Douglas Sewer District will receive $499,146 beginning this July, but the following year would receive $464,887 under the new formula.
All but one of the lake’s 16 General Improvement Districts experience a similar “loss” – where the allocation under the new formula is less than it would have been under the old formula for the same year.
“This isn’t something the GIDs had any control over – the state has created this dependency situation,” Krolicki said. “They still have to perform the same services, but will have less money to do so.”
As a result, the TCC will ask the members of the Senate Government Affairs Committee to:
— Change the base year for the formula to be equal to the current distribution so that no districts lose money,
— Treat enterprise districts equally, so that they receive CPI increases in the growth formula.
Guy Hobbs, member of the bill’s technical committee, said he believes the new formula is far more equal than the old system ever was, so it could not be considered discriminatory.
“Of the many special districts that exist, only about 40 percent receive SCCRT currently,” he said. “There is a lack of equity among all special districts under the existing system – there are some haves and some have nots.”
Enterprise services are traditionally supported by fees and charges, so any revenue shortfall they experience from the new formula should be made up by increased fees and charges, he said.
“The original recommendation from the committee was to eliminate any revenue whatsoever to enterprise districts,” Hobbs said. “There was never any consideration for increasing the allocation- the consideration was for eliminating.”
As far as the complaint about the new allocation being less than it would have been under the old formula, Hobbs said it is only natural for a change to produce some kind of adjustment.
“If everyone turned out the same, it would hardly be a new formula,” he said. “It is all premised on some kind of assumption you make as to whether the existing system is working and fair.”
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