Chamber will hear plan to recoup tax losses
Assemblyman Lynn Hettrick will be speaking about Assembly Bill 616 next week at the Carson Valley Chamber of Commerce and Visitors Authority monthly general membership luncheon.
Hettrick will discuss AB616, how and why the bill passed, and its results. Also, he has a sales tax proposal for a way to replace lost revenue from the new room tax laws resulting from AB616.
The Nevada State Legislature passed AB616 earlier this year, resulting in new laws on how room tax, or transient occupancy tax, must be used in Douglas County. The change came because a large portion of the room tax is collected from the Stateline casinos while only a small amount goes back to the Lake. Currently, room tax revenue largely funds Douglas County’s parks and recreation, libraries and senior center.
Hettrick said the Tahoe Citizens’ Committee (TCC) brought the issue to the Legislature when it tried to form a new county. In addition to splitting room tax revenue, a new county would have split the the school district.
“The county and the school board argued effectively against the new county,” Hettrick said, “but it’s hard to argue effectively against changing TOTs (transient occupancy tax).”
The total gaming take at Tahoe has been decreasing 3.5 percent a year recently, Hettrick said. Only 37 percent of Douglas County’s room tax goes toward the promotion of tourism, while most Nevada counties have 75 to 80 percent of room tax revenue going to tourism.
Hettrick said it was difficult for a valid argument to be made against the room tax change. Douglas County is the only Nevada county where a majority of room tax money does not go toward tourism, and state law never allowed room tax revenue to fund senior services or libraries.
In addition, Douglas County has the highest per capita assessed evaluation and personal income in Nevada, the second lowest property tax rate and the lowest sales tax rate. While having the lowest tax rates, Hettrick said, Douglas County still received $2 million a year in fair share distributions from Clark and Washoe counties.
“Why should Nevada continue to subsidize the county with the lowest tax rate at the cost of state revenue?” Hettrick said. “Why should we help you, when we pay more? That’s why it passed. It seemed like the right thing to do.”
Prior to the legislation, Douglas County had already agreed to move the 37 percent to 50 percent, but the TCC argued that it wasn’t enough. A select legislative committee ultimately instructed Douglas County and the TCC to try to negotiate an acceptable plan.
After the two groups were in conference totaling more than 40 hours, Hettrick said, both Douglas County and TCC agreed on all parts of AB616, except the specific percentage of money which would ultimately go to tourism. Both groups agreed on the formation and make up of a Tahoe-Douglas Visitors Authority, and that more room tax money should be allocated to tourism.
But, Douglas County wanted the final amount of room tax revenue going to tourism to be no higher than 60 percent, while the TCC wanted it to be no lower than 75 percent. Hettrick said the two groups only asked the Nevada State Legislature to set the percentage of room tax revenues Douglas County was to allocate for marketing purposes. The amount established was 65 percent.
Hettrick said the Legislature passed AB616, and the state senate, with the urging of both TCC and Douglas County officials, also passed the bill.
“That’s the way the whole thing came down,” Hettrick said.
At the luncheon, in addition to talking about how and why the bill passed, Hettrick said he will go over his sales tax plan of how to replace the county’s funds which Douglas County will lose, resulting from AB616.
Hettrick said he believes the county has made the room tax issue out to be a bigger problem than it really is, and his sales tax plan for replacement revenue, with the public’s support, is an answer that will result in little inconvenience to county residents.
He gave the same presentation last week to the Business Council and said the plan was well received.
The luncheon is scheduled for Nov. 19 at 11:45 a.m. at the Carson Valley Inn. Cost is $9.