Planning under way for next year’s budget
Hard to believe, but the planning process for the fiscal year 2000-2001 Douglas County budget is already under way. Developing the budget is a process of determining what services are desired by citizens, prioritizing those services and finding the revenue to support those services. Finding the revenue is the hard part as there is no shortage of desired services.
This past month, I spent some time with Michael Brown, Douglas County’s assistant comptroller/fiscal officer, to get some more insight into the county’s revenue sources. Specifically, I was interested in knowing how much of the revenue used to support county services comes from Douglas County citizens in the form of taxes, fees and charges verses those that come from the towns, state, federal government or other sources outside the county. I was also interested in seeing what the “per citizen” cost is for providing Douglas County core services.
There are a wide variety of revenue sources collected by the county to finance services – property taxes are just one source. As I talk with residents and business owners, there seems to be a perception that Douglas County’s tax rate is high or that property taxes pay for most if not all of the services provided by the County. If one looks at the county’s budget or audit, you will see this is simply not true.
According to Mr. Brown, “Revenue from property taxes makes up only about 20 percent of the total current revenue collected by the county each year – about $7.7 million, plus another $700,000 in penalties and interest (FY 1999-2000). County revenue is budgeted at $42 million.”
Property taxes are relatively low throughout Nevada when compared to other states. Douglas County has the third lowest average overlapping tax rate compared to other Nevada counties. Property taxes comprise approximately 25 percent of the revenue generated from the 41 separate taxing districts located in Douglas County. Other taxing districts include the school district, general improvement districts (GIDs), Towns, East Fork Fire and Paramedic Districts and the State. The Douglas County organization will collect about $7.7 million of the $31.5 million in total property tax revenues estimated for all agencies in FY99-00.
The FY99-00 tax rate for the Douglas County organization is $0.588 per $1,000 of assessed valuation. This is down $0.06 from FY95-96 and only up slightly from last year’s rate of $0.5834. The rate is the combined total of 12 separate property tax components; each dedicated toward a particular county service or services. The largest is the General Fund at $0.3254; others include 9-1-1, China Spring and Social Services.
If property taxes make up only 20 percent of the county’s revenue, where does the rest come from?
Mr. Brown noted, “Just over half of the revenue generated to fund Douglas County services comes from sources outside Douglas County, such as the federal government, tourists and residents of other counties. This revenue comes in the form of room taxes, sales taxes, gas taxes, gaming proceeds and revenue distributed through the State’s consolidated tax distribution formula (a redistribution of taxes from sales, real estate transfers, motor vehicles, cigarettes and liquor). The State’s Fair Share legislation, which governs this consolidated distribution, effectively gives Douglas County an annual subsidy of about $2,200,000.” This essentially means that direct payments by Douglas County residents pay for approximately half the cost of Douglas County services. Not a bad deal.
But most residents pay less than half because almost all of the services provided by Douglas County are pay-as-you-go; that is, you only pay for what you choose to use. Examples include recreation fees that are paid by participants in county recreation programs and Justice Court fines paid by individuals who have traffic violations or commit misdemeanor crimes. Only a handful of taxes or fees are mandated and those are for owners of land, homes and taxable personal property. Certain fees are legally required only if you decide to make improvements or changes to your land, home or personal property, such as building permits, engineering fees, planning fees and recording fees. Therefore, the average cost per resident is even lower because most residents do not purchase building permits, have Justice Court fines or pay for engineering services.
Some national ad campaigns like to tell you that for just “pennies a day” you can benefit from the product or service they advertise. Here’s a chart that shows the approximate number of pennies it costs a Douglas County resident each day for Douglas County services in FY99-00 assuming every resident used every county service.
Column A shows the total daily cost per resident while Column B shows the net daily cost due to revenue from non-Douglas County sources (i.e. tourists and State revenue sharing. While a number of assumptions are used in projecting these figures, they do demonstrate that direct payments by residents and businesses account for approximately 50 percent of the revenue used by Douglas County to provide government services. Comparatively low property taxes and services that are essentially half price – not a bad combination.
As previously mentioned, the cost is considerably less than the net amount shown for residents, as most use only a few of the county’s fee-based services. Remember, the amount shown is for the Douglas County organization only. Costs for services provide by other districts (i.e., Towns and GIDs) are not included.
Your Board of County Commissioners is committed to low property tax rates, funding enterprise operations through user charges and maximizing outside revenue sources, ensuring that development related fees cover the cost of services, and to enhance local revenue through such projects as the Target/Home Depot center. These efforts will continue to keep Douglas County financially fit and one of the lowest property tax counties in the State.
Chart is in Today’s News under Miner’s Chart-11/13.