Bill to change state tax distributions sent to governor

CARSON CITY — The state Senate unanimously passed and sent to the governor Tuesday a bill that would change the formula on how state distributes six state-imposed taxes to local governments.

After a brief discussion, senators passed Assembly Bill 68, which is designed to provide a fairer distribution of sales, cigarette, liquor and other taxes to cities and counties, although it comes far short of giving financially ailing North Las Vegas the additional
$25.8 million a year it sought.

Instead that city, the third- most populous in the state, will receive about $3 million more a year in “C” — consolidated — taxes.

Besides population, the formula bases tax distribution on the assessed value of local governments and the five-year average of the consumer price index. North Las Vegas receives less than Henderson and cities in Clark County on a per capita basis largely because of its declining assessed values.

Fernley, a city of 19,000 in Northern Nevada, is suing state government because it receives $7 per person in C tax revenue. North Las Vegas receives $168 per person. That compares with $376 in Las Vegas, $291 in Henderson, $547 in Boulder City and $437 in Mesquite.

Sen. Kelvin Atkinson, D-North Las Vegas, said his yes vote was meant to support Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, and other legislators who met with local government in the summer to develop a new distribution formula.

“They are still going to get more than they have been getting,” added Atkinson about his hometown. “North Las Vegas pays the highest property taxes in the state and was the city hardest hit by foreclosures.”

But he said the state and other cities don’t have the kind of money that North Las Vegas officials said it deserved. If the formula were changed to give the city what it wanted, then other cities would be back in Carson City in two years requesting another change to the distribution formula, he said.

“It is a difficult balance,” Atkinson added.

Kirkpatrick had wanted the bill passed within 40 days so that local governments could calculate tax revenues for proposed budgets they soon must submit to the Department of Taxation.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.