Raggio property tax plan opposed by cities

Mayors of the state's five largest cities Tuesday said Sen. Bill Raggio's plan to rake off part of growing property taxes for the state would cripple local abilities to provide vital services.

Raggio, R-Reno, introduced SB308 saying large local governments are fat enough to give workers large raises and expand services, while the state's growing responsibilities and unpredictable sales and gaming revenues have left it more and more desperate for cash.

As a result, he said state and university worker salaries have grown at 9 percent below inflation as local salaries have grown 16 percent faster than inflation.

The bill would give local governments the property tax revenue they already receive plus inflation each year -- then split any growth above that amount with the state.

"This would allow the state, as well as local governments, to share in the growth," Raggio said.

Las Vegas Mayor Oscar Goodman, Henderson Mayor Jim Gibson, Mike Montanden of North Las Vegas, Tony Armstrong of Sparks and Reno council member Dave Aiazzi all said the legislation would cripple their ability to serve their citizens.

"It's robbing Peter to pay Paul, and it would devastate local government," said Goodman.

Gibson said it would "undermine our ability to deliver the services the state mandates." He said if the state needs money, it should raise it because "We're not in a position to fund the problems that the state has."

Local officials estimated the bill would cost Washoe County up to $32 million over the next two years. Clark County governments combined said the tab would be more than $50 million next year alone.

Las Vegas fiscal expert Marvin Leavitt and Mike Alastuey, who represents Clark County, said sales taxes are the major revenue source for state and local governments, not property taxes. And both men said those revenues have been slumping for locals, just like the state.

Several of the mayors said they are short police, fire and other needs because their budgets are so tight.

Alastuey and Leavitt said the state receives major benefit from property taxes because the 75 cents levied for schools directly reduces what the state would otherwise have to put into public education each year. That and the 15 cents the state uses for capital projects, Alastuey said, give the state nearly as large a share of the property tax as the cities and counties receive.

The hearing was still under way at press time, but the committee was not scheduled to act on the bill.