County will be $1 million short from ‘compromise’
Douglas County will suffer a $1 million budget shortfall if forced to accept a compromise brokered by the Legislature which shifts 65 percent of the room tax revenue to finance Lake Tahoe tourist promotions.
“Compromise?” said Commission Chairman Jacques Etchegoyhen on Tuesday. “I”m still stunned. ‘Compromise’ is basically a misnomer because apparently we had no say in the matter. It was supposed to be a negotiated settlement.”
Etchegoyhen, County Manager Dan Holler and other county officials were to meet Tuesday with Douglas County’s legislative representatives, Assemblyman Lynn Hettrick and Sen. Lawrence Jacobsen, “to see what the political landscape looks like.”
“If this goes through, it means drastic cuts to parks and recreation or libraries or else drastic increases in taxes,” Etchegoyhen said. “It means unbelievable cuts in park hours or literally closing libraries. I don’t know.”
The Assembly Government Affairs Committee brokered the deal in a hearing Tuesday on AB616. Tahoe County proponents drafted the bill to form a Lake Tahoe Convention and Visitors Authority and collect most of Douglas County’s room taxes for Tahoe-area tourism promotion.
As amended, the tourism bureau will be created, but will be called the Tahoe-Douglas Convention and Visitor’s Authority. The agency will be allowed to control 50 percent of Douglas County’s room tax revenues from Lake properties beginning in 1998. After that, the authority will be able to collect 2 to 5 percent more of the room taxes each year until reaching a cap of 65 percent.
In the event of an economic turndown, the county would be allowed a one-year grace period during that time when it could stop the 2 to 5 percent increases.
Douglas County gets about $4.6 million a year in room taxes. Of that, 37 percent is used for projects that directly benefit the casino zone. That amount was to increase to 41 percent the next fiscal year.
The committee made the decision after negotiations between Douglas County and the Lake Tahoe tourism promoters had stalled. The county had argued for a 60 percent cap while casino lobbyist Harvey Whittemore pushed for 75 percent.
“It’s a compromise in the sense that the government affairs committee said, ‘We’ll cut the baby in half for you because apparently you can’t,” Holler said Tuesday. “Neither side got what they wanted.”
Holler said there were several options commissioners and voters could take to make up the loss which he said will occur over the next six to 12 years if the bill doesn’t change.
“You can cut services or see if voters would support a property tax override to replace those particular services. The board can also look at a utility operator fee or a business license tax. Those three are probably the most logical in terms of the dollars,” Holler said.
The property tax override must be voter approved, but commissioners have the authority to implement a utility operator fee or business license, he said.
Holler said Tuesday’s meeting also was to look at how the bill might be processed. He’s also concerned about the Legislature’s schedule as the session winds down.
“I’ve heard they might adjourn this Thursday or next Wednesday. If they can’t come to an agreement on this bill, it might be kicked into the next legislative session.
“That would give us the chance we’ve always asked for to show that we’re taking a different stance on these issues instead of the Tahoe Citizens Committee stabbing us in the back on the legislative level,” Holler said.
Etchegoyhen said the shift in room tax would exclude Valley room tax revenue, applying only to money collected at the Lake casino core, home to the majority of the county’s gaming establishments.
“This is not a regional solution at all,” Etchegoyhen said. “It’s typical of what the state and Douglas County does to itself with this parochialism, this ‘my turf, your turf’ kind of thinking.”
Etchegoyhen said the compromise has shaken his faith in state government.
“I know folks give the county government a bad time, but I’m a little dismayed. My confidence in state government is wavering,” he said. “We’re going back Tuesday to see if it’s a done deal or if there is any room to negotiate.”