Washoe County seeks refund of diverted taxes from state

CARSON CITY -- Washoe County is demanding a $21.5 million refund from the state for diverting property taxes from the local government over the past three years to pad state coffers -- a practice that was common until a Nevada Supreme Court ruling in May said the budget-plugging tactic was unconstitutional.

County Commission Chairman John Breternitz, in a letter hand-delivered Thursday to state Treasurer Kate Marshall, said the county would withhold a $393,000 final payment to the state for the fiscal year that ended June 30.

Clark County has made a similar demand, seeking a refund of $102 million in the wake of the court ruling that said the state's attempt to take $62 million from the Clark County Clean Water Coalition amounted to a special tax and was unconstitutional.

"It is the duty of the county commissioners to act in the best interest of the citizens of their counties, and Washoe County taxpayers and citizens were disadvantaged by AB595 of 2007 and AB543 of 2009," Breternitz wrote, referring to legislation passed in those legislative sessions authorizing the taking of property taxes from Clark and Washoe counties.

The 2007 measure required the two counties to give up a portion of property taxes collected for capital construction projects to the state highway fund for road projects in those counties. The bill passed two years later required them to give up 9 cents per $100 in assessed valuation collected in property taxes to the state.

A unanimous ruling from the high court, issued May 26, imploded Republican Gov. Brian Sandoval's proposed two-year budget that relied on similar diversions, such as the continued taking of 9 cents in property taxes from Clark and Washoe, the state's two largest counties.

The order cast doubt over $657 million in revenue used to balance Sandoval's spending plan and led to a late-session compromise extending $620 million in temporary taxes to fill the gap.

Unlike the counties, the water coalition never surrendered its funds, taking the fight to court instead.