Incorporation and Taxes…
It’s a community fear that if Moapa Valley incorporates we will have to bear this financial burden ourselves. What will we do? We don’t have a large commercial base, casinos, or industrial base to support a city. I don’t have all the answers, but I desire to share my insights on this topic.
If the community becomes an incorporated area, we do not need to become a Mesquite, or a Henderson. Nor do we need to provide sales pitches to businesses and tourists about our area in order to increase a tax base.
There are several geographic areas that have incorporated and have retained a small town lifestyle. These include: Boulder City, Kanaraville, Enterprise, Kanab, and LaVerkin. The closest to home would be Boulder City. Boulder City controls the annual building permits each year, an item this community may consider. My point is that we can become an incorporated area and not turn into a Henderson or a metropolis. We will need leaders that can plan growth around striving to maintain a small town feel and rural lifestyle.
If the community incorporates, the largest source of revenue for the city’s new operating budget will come from a consolidated tax distribution allotted monthly to the community. This is a general state fund that was set up to help local governments. Had we been incorporated last year, our allocation would have been $70,000 a month or $845,789.91 over the fiscal year for the city’s operating budget (Statistics taken from the Nevada Department of Taxation). I don’t know exactly what amount this would contribute to the cities operating budget, but I assume it would be about 40-60% of the budget.
In 2000, the University of Nevada Reno provided a study titled “Legal And Economic Considerations For Incorporation Of Nevada Towns”. This can be found at http://www.cabnr.unr.edu/uced/Reports/Technical/fy2000_2001/2000_01_02rpt.pdf
I would suggest anyone interested in learning more about incorporating to review this document. It is very insightful regarding the pros and cons of incorporating a rural area. In this study, UNR compares the operating budget of unincorporated towns to incorporated cities. Such comparisons are the city of Carlin (2680) [population] to the town of Minden (2400); city of Lovelock (2880) to the town of Gardnerville (2780); city of Yerington (2870) to the town of Tonopah (2760); city of Elko (19,760) to the town of Pahrump (18,790).
According to the mentioned study, the property taxes for the unincorporated towns were 21% of their total revenues. Incorporated cities from the study had property taxes at 9% of their total revenues. This shows that a city’s operating budget relies less on property taxes than other sources of revenue. Whether this would be the same for our community is still unknown.
The community’s current tax rate is 2.5191 or 0.025191%. This means that per $100 assessed value of property, we pay $2.5191 of that $100 to taxes. Through the Nevada State Tax rules, the tax rate can not exceed $3.64 per $100 assessed value. Realize that this is based on the counties assessed value, not what you think your property is worth. Compare the following other areas in the county and their property tax rates: Mesquite (2.7661), Laughlin (3.3407), Henderson (2.8973), Coyote Springs (2.7374).
I do not have the expertise to say exactly how our property taxes will be affected if the community incorporates. The method to discover this is to initiate the incorporation process. The property tax consequences will be analyzed. The proposed new property tax will be made known. As a community we can decide if such a cost is worth governing ourselves. We will also need to analyze the benefits of governing and planning the future of our Moapa Valley rather than rely on outside government and how the county plans for the future of their Moapa Valley.
I believe that the benefits to incorporate would outweigh the increase in taxes that may come. It is foreseeable that an increase will come, but property taxes will not be the sole revenue for the new city. The tax impact will likely be smaller than you anticipate.
Ryan Wheeler
Published in the Moapa Valley Progress on 2/4/09
From my comments some might think that I am against the incorporation of the valley. I guess I should make myself clear, I am not against that. What I am for, is responsible government without the increased taxation of individuals. Governments can excessively tax individuals and lose control of the money. And once taxed, those taxes are never given back to the citizens. For example, we are currently being taxed $24 a year for a TV signal. That will never go down. Do you think that it will ever stop? Now that the TV board has a steady revenue stream, they will never let that go. If we can incorporate without increasing taxes, or putting the local/national economy into debt, then lets look at it. But no one is showing us numbers. There has to be some numbers somewhere. And before we do a study that the county/city has to pay for down the line which could cost taxpayers tons of money, simple questions could be asked before hand. Just looking at the state budget can give me an idea that at this time it looks like a bad idea. This is the reason why I want to see some numbers/projections of what this board thinks is going to happen. I hope that they are not just saying “Hey lets make a city” and thats it. There has to be some substance to it, and this is what I want to see.
It is amazing that we are not hearing from anyone lately. No information is being shared with the public, no numbers, no projections, lets just do it. Sounds like the way a lot of subprime borrowers, lets just get the loan, and worry about how to repay it later. If we have problems, we can borrow more, or just forclose. Has anyone of these people heard about the Nevada economy? Budget cuts anyone? So if an increase in PROPERTY tax isn’t the answer what is the answer? Let’s see. We have the CTD. We have tons of taxable sales here. I haven’t seen the numbers, nobody wants to share, but I would bet that just the local stores generate over $1 billion in taxable sales locally, yea right. But hey, I’m just trying to get the numbers to look good so I can incorporate. Then we have the cigarette/liquor tax. Every cornor in Moapa seems to have a new liquor store on it. And we have so many cars on the roads here, so we get some money from the Motor Vehicle Privilege Tax. Real Estate is so HOT here, tons of money will be generated by the Real Property Transfer Tax. We could go through all the revenue streams they say will bring in money to pay for the NEW MAYOR, COUNCILMEN/WOMEN, such as licenses, permits, franchise fees (we have so many franchises here), charges for services, fines, forfeitures, grants, blah, blah, blah. What does this all mean?? MORE MONEY OUT OF YOUR POCKET!! For what?? What are you NOT getting now that you would get as an incorportated city? Someone got to be on the MVTAB because they got fewer votes than someone else? And that means, what? If you don’t like it, run for commissioner, or the MVTAB. Don’t try to charge me because you don’t like something. If you want to incorporate, I suggest you PAY the expense for everything involved. Whom ever the 5 Qualified Electors are that sign the Notice to Incorporate wont be getting my vote for anything, atleast it will be a public document.
We can get some kind of idea though as to what tax revenue we are dealing with. The people (whomever is leading this) must have some idea or plan. If they are planning to file the Notice to Incorporate, they only have 90 days after that for the Petition for Incorporation. This must include the total acreage, number of persons, number of owners of record of real property within the area, ect. Plus, there must be some plans at to what is being planed on providing police, fire, maintaing streets, water, sewer, garbage, admin services, etc. And there should be a budget for cost and sources of revenue, all this according to NRS 266.019. Someone is not being honest here it seems, because 120 days (30 until Notitce then 90 until Petition) is not a lot of time to get this done. Someone must have some plans and numbers as to what is going on and is not sharing them with the public. I would like to see these numbers and see what the projections are going to be. I have also read the Reno study and it looks like most cities are operating with negative budgets. Is this what we really want to do. Pahrump is doing go, they have a nice casino to bring revenue in, maybe we could do that, BEFORE we incorporate. They also have legalized prostitution, lets do that. You also say that an increase in my taxes will be small?? Are you crazy? Like I said I HAVE to pay $24 a year for someone to watch Jerry Springer for free. More than likely, my taxes will jump up to 3.3% to 3.5%, it will be over $100 a month EXTRA for that “smaller than you anticipate” So please, show us some spreadsheets on some projections. If you dont have any, maybe the people working on this project shouldn’t be the people working on it.
We can’t know what will happen with taxes until we actually do a feasibility study. By starting the process that is outlined on the path to incorporation link, we will be able to find out exactly what will happen with our taxes, whereas right now, all we can do is speculate.
Also, most people think that there are not enough businesses here to support a city, and that property taxes are the major source of revenue for incorporated. This is a logical assumption, but it is not how Nevada has designed its tax structure. What Nevada uses is called the Consolidated State Sales Tax. An explanation of it can be found on this page, but in a nutshell, a city doesn’t have to have a lot of businesses to have a tax base (look at Caliente, NV as an example), and property taxes usually aren’t the main source of revenue.
This is one of the big topics - maybe the biggest - and we will have more information posted here shortly.
Ben
If we incorporate what tax districts are being proposed for the city? 810-832? By defining the bounds of the city and the tax districts we would know the assessed value from the Assessors office and then can compute the tax revenue generated at the current rate. Of course the tax rate would have toincrease since there is no real gaming or liquor license. No business is allowed here, so business license revenue will be at a fixed rate only to those already here. We could add a local sales tax to increase revenue just to stick it to the snow birds or weekend travelers, or apply for government grants again increasing my taxes in the end. We could sell bonds, again increase my tax. All this leads us to paying for a Mayor, Council Men/Women (MVTAB Members?), Sheriff, Fire, etc. We would have to ask for a bail out from the government every year just to balance our budget. Maybe we could ask to be added to the next stimulus plan. With the economy the way it is, I do not want my tax increased just so I can say I live in an incorporated city. If the MVTAB and those that want an incorporated city work to show us they want to grow the area by having some business come in to generate jobs and the local economy, maybe incorporating would be good. We have plenty of land to offer to businesses while keeping a rural area. I already have to pay a tax of $24 a year for a TV signal that I don’t use, which will never go down, once your taxed, it never goes away.