Things are not always as they seem in the complicated world of sales tax, something that's perfectly illustrated in today's page A1 story on sales tax revenue in local counties.
Douglas County, for example, should seemingly be reaping a financial windfall from its new big box developments, but is actually subsidized by other counties, including Carson City. It is receiving a guaranteed level of sales tax revenue, a system set up to ensure its financial viability after the state's property tax structure was changed two decades ago.
And while Carson City is desperately seeking to attract new retailers, including those eying the wide open spaces of Douglas County, it will actually benefit as well if Douglas County grows to the point where it is no longer subsidized by other counties. No one knows how long that might take, considering sluggish sales tax receipts of late.
This doesn't mean the competition between Carson, Douglas and Lyon counties for new retailers will lessen. Douglas County is only serving its residents by recruiting new businesses and employers and working toward longterm economic vitality. In Carson City, the stakes are higher, as the city is directly dependent on its retailers - there is no guarantee to save it from financial disaster. It's also worth remembering that the $123,000 Carson City subsidy to Douglas and Lyon counties isn't huge in relation to the city's $117 million budget. On the other hand, it's not insignificant either, considering the city is struggling to make up a $600,000 shortfall in its budget. But a single big box store locating in the city would generate far greater sales tax revenues than the amount the city subsidizes those counties.
It is not the fault of Douglas or Lyon counties, but there is something intrinsically wrong with a system that has Carson City, facing a desperate struggle to pay for basic services, subsidizing neighboring counties it is in competition with, even though those counties are facing struggles of their own.
We can only hope our legislators are paying attention.