At issue is whether tax rates ought to be hiked elsewhere and, if so, where those tax revenues ought to be allocated.
In 2002, voters approved a ballot question supporting the creation of the Animal Shelter Bond and Tax Override, which allows the county to impose a tax rate of up to three cents for RAS operations.
But because the RAS now has about $1.5 million in its ending fund balance, the tax rate can be reduced two cents to $.0063 from $0.0263 for just one year, county officials said. Moreover, the RAS operating budget has been slashed by more than $450,000 for the current fiscal year to help close the county’s general fund budget deficit, meaning administrative support for animal services has also been cut. Hence the need to grow the county’s general fund operating rate. County officials said the overall assessed tax rate on residents would remain unchanged — the reduction in the animal services rate would be matched with an increase elsewhere.
Washoe County is prohibited by law from transferring revenue collected through the animal services tax rate to the general fund.
However, County Manager Katy Simon told the Sparks City Council that another option exists.
According to a staff report prepared by the county, “As the City of Sparks has done in moving rate from debt service to operating rate when debt has been repaid, the County’s rates may be reduced in one area and potentially increased in another, which is entirely within the law and appropriate financial practice.”
Legal, yes, but is it the right thing to do? And what is to be done with the added revenue to the general fund? Those were the questions on the minds of City Council members.
Simon acknowledged the tricky nature of the issue.
“Things allowed are not necessarily what you want to see happen,” she said.
Councilman Ron Schmitt wondered whether the county’s proposal runs counter to the spirit of the ballot question that voters approved. He said voters read such referendums in different ways and likely were unaware that the county could reduce tax rates for animal services only to collect the same amount by raising other taxes and spending the revenue as it pleases.
“This doesn’t look like we have a choice,” Councilman Mike Carrigan said, adding that the County Commission has the only vote in the matter. Commissioners will not vote on the proposal until sometime in the spring or summer of 2012.
Councilman Ed Lawson said the county was “subverting the will of the people.”
“I’m pleading with the commission to think long and hard,” he added.
Simon said the tax revenues deposited into the general fund could help offset cuts to other mandated services that are currently under-funded or feeling a severe pinch because of budget shortfalls.
If the proposal is approved, several council members said they would support using the new revenues in the general fund on senior services or child protective services — both of “which also have voter-approved (tax) rates, but which are insufficient to fund adequate service levels and which have been regularly subsidized by the general fund,” according to county staff reports.
“It’s an equity issue,” Mayor Geno Martini said.