Local governments take a hit from Nevada Legislature

Faced with a historic revenue shortfall, Nevada lawmakers balanced the budget by raising several state taxes " and also by approving a "tax grab" of existing levies that had been going to local governments.

Representatives of cities and counties, who faced serious shortfalls of their own, lobbied against it, but there was little they could do to stand in the way.

That's because the counties and cities are governed by state law, and any change they proposed would have to be approved by legislators.

"We're disappointed, we're very concerned," said Jeff Fontaine, director of the Nevada Association of Counties. "There is going to be an impact, and of course the Legislature will be long gone when these impacts really start to hit home."

The biggest blow came with the passage of AB543, which takes property taxes from Clark and Washoe counties.

The original plan in Gov. Jim Gibbons' budget proposed redirecting 4 cents of every $100 of assessed property value from the counties to the state.

In a hearing on the bill, Clark County lobbyist George Stevens asked a money committee to consider an alternative, to impose a tax for capital improvement projects. He said the levy, which amounted to 5 cents of every $100 of assessed property value, would bring in more money for the state and would be less painful for counties.

Legislators liked the idea " so much that they decided to take both the 4-cent levy proposed by the governor and the 5 cents that Stevens had suggested.

Clark County faced a $120 million shortfall in its budget, even before the measures were approved.

Other proposals included sweeping an indigent accident account which is used to pay counties' hospital costs for patients who lack funds, increasing fees for tax levies, and reducing hospital reimbursement rates.

"It's like death by paper cuts," said Sabra Smith-Newby, lobbyist for Clark County. "Things are continuing to decline. It's going to be a challenge to determine how to deal with the cuts and fiscal impacts."

Assemblywoman Sheila Leslie, D-Reno said she and other legislators held several meetings with the counties to look ask for suggestions. But after the property tax debacle, lobbyists were wary.

"I think a lot of us feel very badly about trying to take the county's money," Leslie said. "We looked and looked for ways to help them. But the cities and counties are creatures of the Legislature, and we are responsible for providing the state budget."