Wednesday, February 6, 2013

Gone With the C-Tax

Remember the C-Tax? Wait, what?

Come on, you must remember the C-Tax. The City of Fernley sued over it last year. The Nevada Supreme Court has since dismissed part of the suit while sending the rest back to district court.

But that's just the start of it. Last April, we examined how North Las Vegas also got the short end of the C-Tax stick. Long story short, Henderson received double the C-Tax revenue of North Las Vegas despite having only about 50,000 more residents (North Las Vegas has 217,482 residents compared to Henderson's 267,270 residents). And on top of that indignity, North Las Vegas must fund its own libraries while the state directly funds Las Vegas-Clark County and Henderson Libraries. Because Henderson and Las Vegas have higher property values than North Las Vegas, they receive far more state funding.

Apparently, North Las Vegas has finally had enough. During the interim, some legislators were contemplating changes to the C-Tax. Now, Assembly Speaker Marilyn Kirkpatrick (D-North Las Vegas) is championing AB 68. However, North Las Vegas officials don't think it goes far enough. So they proposed an amendment... An amendment that may blow up the entire AB 68 accord.

Attached is our proposed amendment to AB68 and an additional sheet that outlines the reasoning behind the amount of base adjustment listed in the amendment. I will tell you that we have not gotten any sign-off from the City of Henderson either on this language, the amount requested, or even if they support the amendment.

Our reasoning for including them is that all of the modeling done by the CTax Interim Committee working group reflected that both Henderson and North Las Vegas are deserving of a base adjustment. To not include them would defeat the purpose of having this one time base adjustment truly make all the cities in Clark County have an equitable starting point for the new formula reflected in AB68. It is very important to realize that by using the excess distribution this year as the source of this base adjustment - no entity in Clark County will receive less money than they received the previous year. Because AB68 will roll excess into the base going forward, if a base adjustment is determined to be prudent in a later year - entities may in fact receive less. That would not be the intent of North Las Vegas.

We simply ask for the opportunity to present our information, facts and reasoning behind this proposed amendment and that the committee give it due consideration. We in no way intend for our actions to do anything to jeopardize the passage of AB68. This amendment will start everyone on a fair and equitable base going forward under AB68.

Respectfully submitted,
Dan Musgrove
On Behalf of the City of North Las Vegas

Apparently, Nor'town thought inclusion of Henderson could help secure the amendment requesting more C-Tax funding. But instead, Henderson officials are keeping their distance from this amendment. After all, Henderson is already getting a pretty good deal from the current setup. And city officials don't want to upset Speaker Kirkpatrick, the one who seems to be calling the shots on C-Tax reform in Carson City.

What we have here is a strange mix of terrible tax policy, a possibly sincere attempt to fix it, a clash of personalities, and perhaps some brutal electoral politics as well. As we've discussed before, the current C-Tax structure may very well be a civil rights violation. Poor minority heavy communities in North Las Vegas have been chronically underfunded as wealthier and whiter communities in the state have enjoyed more state funding. There's something inherently wrong in this.

And North Las Vegas is now feeling the pressure to change this. It just so happens that municipal elections happen this spring, and Mayor Shari Buck (R) is running for reelection. Yet Henderson Mayor Andy Hafen (D) is also running for reelection in his city. And I doubt Henderson City Hall has any kind of appetite for ruining its relationship with #NVLeg leadership as both AB 68 and the broader budget are being negotiated.

So we now have another hot mess. And yet again, it revolves around Nor'town. And state legislators are reminded again of how faulty Nevada's tax structure truly is. Such is the story of our fine state.

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