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County balances tax refunds, risk fund
by Joshua H. Silavent
Oct 03, 2011 | 772 views | 0 0 comments | 3 3 recommendations | email to a friend | print
RENO — On Sept. 27, the Washoe County Commission voted down a proposal to increase the vehicle registration tax by one cent in order to help cover property tax refunds to more than 8,000 Incline Village homeowners who had been overcharged in recent years.

That decision was not surprising given the many objections to raising taxes expressed during past commission meetings.

“I don’t think it’s right to levy a tax at the height of the recession,” Commissioner David Humke said in July when the issue was first addressed.

But the decision does provide a window into larger budget woes facing the county.

The county’s share of the property tax refunds is $18.4 million. The county will take about $8.4 million from its employee health care fund, $7 million from its risk management fund and $3 million from its capital projects fund in order to cover this cost.

The remaining amount owed, which totals more than $24 million, will be allocated proportionally to other taxing entities that initially received the revenue, including the Washoe County School District (WCSD), the state of Nevada, the North Lake Tahoe Fire Protection District and the Incline Village General Improvement District.

The reduction in the risk management fund, which includes an additional $7.5 million directed to the general fund, increases county liability, officials said.

“We’re at a point in trying to manage this budget that this is a real risk,” said Commissioner Kitty Jung, particularly if lawsuits or employee payouts increase while the fund is drained by about 43 percent.

Jung said she was open to revisiting the proposed vehicle registration tax if further layoffs would result without it.

And this goes to the heart of the county’s dilemma.

The commission approved a new round of budget cuts for all departments last week, resulting in the elimination of an additional 146 positions. That brings the number of position layoffs to 915 in the last four years.

County Manager Katy Simon acknowledged that more cuts might come, but she is hopeful that negotiations with employee unions, coupled with accurate economic and revenue forecasts, will limit further spending reductions — at least for this fiscal year.

And though there is “a long way to go before we are unable to meet mandated services,” Simon said “it is getting increasingly difficult” to keep county government sustainable.

Simon said that Washoe County is facing budgetary challenges the likes of which are incomprehensible to similar jurisdictions around the country.

“No one is dealing with the level of dramatic cuts that we are,” she said.

For example, Washoe County now employs fewer than six full-time positions per 1,000 residents. The national average is 10 employees per 1,000 residents, Simon said.

It’s not all bad news, however. Simon said the county just had its bond rating affirmed and some officials see the fundamental services review plan as a long-term, sustainable solution to the ongoing budget crunch.

Nevertheless, it is clear that the county’s current fiscal year budget remains in a state of limbo. And this just ups the pressure.

“We have to be responsible with tax dollars,” Jung said.

Perhaps easier said than done.

“It’s a high-wire act,” she added.
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