Legislative Impact
• In any legislative session, Washoe County tracks about half of the bills introduced as they have some kind of impact upon our operations.
• AB 543 probably had the most impact on us this session.  This legislation redirected 9 cents each from Washoe and Clark County’s property tax rates to the state.  A portion of these revenues (about 22% in Washoe) will be taken from the cities within Washoe and Clark counties.
• The Legislature also imposed an additional 1% sales tax collection fee on us and redirected another 2.5 cents of property tax currently dedicated to our indigent medical funds to go to the state.
• For Washoe County, this is a total loss of about $15 million per year, or $30 million over the biennium.
• Having just implemented some severe spending reductions, including wage reductions and layoffs, meeting this new deficit is going to be challenging.
• Even if desired, the County Commission cannot increase our property tax rate since it is currently at the cap of $3.64 cents per $100 of assessed value.
• The 3% property tax cap legislation passed in 2007 limits the amount that a taxpayer’s property tax bill for their primary residence can increase.  This means that the most that property tax revenues can increase is about 3%; next year we anticipate revenues from property taxes will go DOWN by 3.5% because the property values that rates are applied to are going down.  For 2010-2011, property tax revenues are projected to go down further by 7-10%.
• Washoe County has forgone 30 cents worth of possible tax rate increase over the past years, but the current rate is comprised of any rates other entities have implemented (called an overlapping rate) and is at the max allowed by law.
• Clark County does have capacity to increase their property tax rate.
• The Legislature passed enabling legislation that would allow the County Commission to impose an additional one cent Government Services Tax for vehicle registrations in an effort to make up some of the lost revenue.  For Washoe County, this would generate about $9.8 million per year but Commissioners are mindful of the impacts of the current economy on citizens and are not enthusiastic about raising taxes to offset Legislative action.
• The County Commission will consider staff recommendations on how to address this new deficit at their 6/23 meeting.  It is anticipated staff will recommend careful use of restricted savings to offset these losses, thus increasing future risks, but this may be unavoidable.  The County Commission wants to avoid further service cuts and staff reductions if possible.
• Key message:  Redirecting county property tax revenues to the state will reduce Washoe County’s revenues by $30 million over the next two years.  Given the severe budget cuts we’ve recently made, this is a difficult challenge.