Douglas still sees business as usual despite retail growth boom

A retail sales boom in Douglas County during the past year has cash registers at Wal-Mart rack up millions in sales, yet county officials don't have bundles of cash to pay for extra programs or new services.

In fact, the move of the retail giant into northern Douglas County only generated enough extra revenue to make up for a loss the county was facing for the year.

Fewer visitors staying overnight in Lake Tahoe, an economic downturn following the 2001 terrorist attacks and several other factors have resulted in less revenue for the county than expected.

Douglas County did not receive what the state had estimated it would this fiscal year, said Michael Brown assistant director of administrative services.

The county received $170,000 less than anticipated in sales tax money during the 2001-2002 fiscal year. It also had less income from interest as national interest rates dropped from a typical 4.5 to 5.5 percentage rate to the current 1.7 to 1.8 percentage rate following the attacks.

The county lost $300,000 in income because of the drop in interest rates, Brown said.

"Economically, that's a huge deal," Brown said. "Had we not had Wal-Mart we were looking at a significant loss in revenue from what we'd already planned."

That doesn't mean the increase in sales isn't positive.

"It doesn't hurt anybody for Douglas County to do well," Brown said. "It may mean more money into the (state) pool that can be distributed."

But even the state distribution has shrunk, as Douglas County may only see a 1.8 percent increase in the money it gets from the state pool next year. The increase is usually anywhere from 4.5 percent to 7.5 percent, Brown said. With increases in energy costs, medical insurance, liability insurance, personnel costs and other services, the county will have to make up the difference to maintain its current level.

County Manager Dan Holler characterized the county's condition as stable in a report to commissioners Feb. 6.

"Our assessed value is growing, our population is growing, our revenues in general are growing, our business base is growing and public services are continuing at effective levels," Holler said. "I believe the future holds a positive outlook for Douglas County, but with some (uncertainties)."

The story of how Douglas County gets money to operate is slightly complicated. But in a nutshell, the once rural county gets some of its revenue income to pay for general services from larger cities in Nevada that make more money.

The state has set up a system under which Carson, Churchill, Clark, Elko, Eureka, Humboldt and Washoe counties contribute a portion of their sales tax revenues to a central fund. That money is then turned around and distributed to smaller, rural counties to pay for services, "guaranteeing" the smaller counties money to operate.

The state also distributes revenue from cigarette and liquor taxes and counties get a portion of a basic city/county relief tax, real property transfer tax and motor vehicle privilege tax. The state bundles up the package of revenues, called state consolidated taxes, and gives it to counties.

Carson City only contributes 2.5 percent to the total funding distributed to all other rural counties. Most of the shared revenue comes from Clark County.

Douglas County remains a "guaranteed" county and will keep the designation until it makes $202 million more in annual gross taxable sales -- or about a third more than the total amount currently generated.

Last year, Douglas County received $18.8 million from in state consolidated taxes. This was shared with enterprise districts, towns, and other special districts. Douglas County only received $10 million of the funds.

The county gets the rest of its operating monies from property taxes and other revenue streams.

The county does benefit directly from a 1/4 cent sales tax that pays for parks, libraries, the airport and senior services. The money generated goes directly into the county's Room Tax fund, which is used to fund the same services. Room tax revenue also makes up that fund.

However, room tax revenues were down 3 percent this year and are expected to remain flat. Also, the state will require 56 percent of that fund to go to the Tahoe-Dougals Visitor's Authority, up 2 percent from last year.

The room tax fund will not see a substantial boost because of those two factors. Parks, recreation and senior programs will not add new services, officials said.

"It's not a giant windfall," said Scott Morgan, director of community services and Parks and Recreation. "It's helping us keep pace with current growth and expenses."


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