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Legislative Commission clears way for Laughlin to become city

Laughlin residents soon will put to a vote whether their town will become its own city.

A handful of residents cheered and clapped when the state Legislative Commission on Thursday decided it is fiscally feasible for the town about 100 miles south of Las Vegas to incorporate. The decision came after a months-long debate about whether the town could survive alone financially. The town now is controlled by the County Commission.

Next month, the commission is expected to set the date for a special election, which could be as early as June. Commissioners also are charged with the responsibility of forming a committee to draft ballot language explaining arguments for and against incorporation that will appear alongside the question proposing a new city.

The state Legislative Commission suggested that language is clear so residents understand the proposal could lead to a tax increase and cuts in services to compensate for projected immediate budget shortfalls should voters choose to make the town a city.

If the proposed local government couldn’t pay its bills, the state would pick up the tab.

But legislators keep veto power over whether a city can be formed, even if voters approve it. The committee gave the 2013 Legislature the option to repeal the charter if it determines the city isn’t financially solvent or to delay incorporation from the July 1, 2013, target date.

THIRD TIME’S A CHARM

Senate Bill 262, proposed by state Sen. Joe Hardy, R-Boulder City, required the Legislative Commission or the County Commission to vote on the Laughlin incorporation after reviewing a state feasibility report.

Earlier this year, the state panel deferred the vote to the county, which rejected the proposal. Proponents brought the issue back to the state Thursday.

David Floodman, president of the nonprofit Laughlin Economic Development Corporation, a proponent of the proposal, said the vote puts the decision in voters’ hands.

“We feel this is a good compromise,” Floodman said. “We’ve never been afraid of an additional process to make sure this is clear to everybody.”

James Vincent, a Laughlin resident, disagreed that the town was financially ready to incorporate and said the County Commission voted “responsibly” against the proposal earlier this year.

According to the Nevada Department of Taxation, the proposed city of Laughlin would need an annual budget of $11 million, about $3.5 million to $3.9 million coming from consolidated tax funds transferred from the county. According to the department, the new city would start with an immediate budget deficit, use up all its revenue and end its first year significantly in the red.

But proponents of incorporation have criticized that report, saying they could find savings in police and fire salaries.

CITY OF LAUGHLIN

The proposed city would model itself on Las Vegas with a county island casino corridor separate from the city boundaries. Fire and police services could be outsourced, or city departments could be created. The county would be responsible for providing services to the business corridor.

City revenue would come from property tax rates, consolidated taxes and other municipal fees.

Nevada’s consolidated tax distribution formula is the equation used to give portions of state tax revenue back to communities statewide. The pool is formed by six taxes, including a cigarette tax, liquor tax and a government services tax from vehicle registration. Most of the consolidated taxes come from Laughlin’s casino corridor. Most of those casinos are opting out of the proposed city, fearing the incorporation, if passed, could fail financially.

But Sue Lowden, the former Republican candidate for U.S. Senate whose family owns the Pioneer Hotel and Casino in Laughlin, spoke in support of incorporation, which she said would benefit her business.

“We would become the first casino to opt out of the county and become a part of the city,” Lowden told the state Legislative Commission. “If we want to have our driveways expanded, rehab our building or include more handicapped rooms, we would like to go to a City Council and a mayor of Laughlin to help us decide and give us permission to do that.”

The proposed city boundary includes the ENN Mojave Energy Corp. solar energy project, expected to create thousand of jobs and generate millions of dollars in property tax revenues.

The Chinese-based energy company’s project hinges on reaching a purchase power agreement between an energy seller and buyer. The energy company has 14 months left to reach one, according to its deal with the county.

The town of 7,300 people rests on the banks of the Colorado River across from Bullhead City, Ariz., an area with more shops, services and about 40,000 people.

Laughlin has one hometown grocery store, no supermarket chains and few fast-food chains.

Over the past decade, Laughlin’s population has grown at a snail’s pace, with 247 people moving to Laughlin in that time, according to the latest census figures.

Contact reporter Kristi Jourdan at kjourdan@reviewjournal.com or 702-455-4519.

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