When the pandemic shut down the economy in mid-March, Carson City City Manager Nancy Paulson said she expected the county’s sales tax revenue to “take a nosedive.”
“We dropped our projections by $3 million for March through June, and then we cut almost another $4 million for the fiscal 2021 budget,” she said. “But, what actually happened with the sales tax, none of us could’ve predicted.”
Paulson was speaking during the Northern Nevada Development Authority’s annual State of the Counties event, held virtually Wednesday morning and featuring representatives from the six counties within NNDA’s “Sierra region” — Carson City, Douglas, Churchill, Lyon, Storey and Mineral.
In Carson, Paulson said sales tax declined in March (-12.7%) and April (-5.4%) before increasing 23% in May and 22% in both June and July. The increases continued through October, noting that Carson City doesn’t have November or December figures yet.
“During the pandemic, the city saw taxable sales like we’ve never seen before,” Paulson said. “More than a few calls were made to the department of taxation to make sure that there wasn't a mistake — we thought maybe we were taking Douglas County's revenue.”
Carson received $10.2 million in CARES Act funding through the state and was able to “use every bit of it,” she added.
The three biggest slices of the grant included offsetting the city’s $4.8 million worth of COVID expenditures, followed by $2.35 million to Carson Tahoe Regional Medical Center and $1.55 million to the Carson City School District. The grant was also used to support local businesses with PPE and sanitation supplies ($500,000), support nonprofits ($800,000) and long-term care facilities ($200,000).
Meanwhile, Paulson said total building permit valuation was $101 million for the 2020 calendar year, with $63 million in residential and $38 million in commercial.
Residential projects she expects to begin this year include Little Lane Village, Blackstone Ranch phase one, Lompa Ranch and Andersen Ranch. Meanwhile, commercial projects expected to break ground this year include a Panera Bread restaurant and Dutch Bros. drive-through coffee shop.
Because of COVID, Douglas County projected its room tax fund to drop 57% for the 2020-21 fiscal year. Instead, room taxes are up 49%, said county manager Patrick Cates. The county’s general fund, meanwhile, saw its property taxes stay level, its consolidated tax increase 14% and its building permit fees jump 77%.
“Overall, we’re very surprised and stunned that at this point, January 2021, our finances appear to be in good shape,” Cates said. “We’re very cautious about this. I think there’s a lot of uncertainty going forward. But, so far, the county’s financial health is in pretty good shape.
“I think a lot of the reasons these revenues have not declined has a lot to do with the stimulus bills that Congress has passed.”
To that end, in September 2020, Douglas County received an $8.9 million CARES Act grant through the state. A highlight of the funds, Cates said, was the county instituted a small business grant program, giving away 64 grants, ranging from $5,000 to $50,000, for a total of $507,000.
“Frankly, it didn’t seem like enough, but we were glad that we could help the businesses,” Cates said.
The county also distributed CARES Act funds to nonprofit JOIN Inc., which helped 13 local residents displaced or unemployed by COVID-19 get training. Four of the clients are now employed with local businesses, Cates said.
Douglas also granted funds to the visitor authorities from both Carson Valley and South Lake Tahoe for their “Sierra Safely” digital marketing campaign, promoting tourism recovery for Douglas County. In three months, the website had 40,000 visitors and 73,000 video views, Cates said.
“Although we thought we would take a big impact in our tourism economy, Lake Tahoe benefits from a lot of local drive traffic from California,” Cates said. “Even when there were restrictions, what facilities were open were full to capacity within the governor’s guidelines.”
Churchill County Manager Jim Barbee said the county’s main industries — agriculture, energy production and Naval Air Station Fallon — have remained steady, though he noted the pandemic has underscored some of the economic development needs in the county.
“What we realized early on is we didn’t have the facilities that we needed to be able to deal with emergencies,” Barbee said.
With that, in early June, under an emergency clause, the county started construction of a 75,000-square-foot civic center, slated for competition in December 2021.
Barbee said the center is designed to initially be used as a COVID testing and vaccination site. Eventually, it will also serve future needs of the county, such as agricultural events and sporting events.
Barbee said the county is also “very focused” on adding infrastructure and residential developments and multi-family workforce housing. The county, he said, saw 341 total building permits in 2020, including just 72 single-family dwelling permits.
“Our housing studies show that we’re significantly short on rentals in the community,” he said. “And the Navy, with the expansion of the F-35 program, is going to be bringing another additional 1,500 jobs over the next three to five years.”
Tax-revenue wise, he said the county is currently “a little bit over” as it moves into the latter half of the 2020-21 fiscal year.
In Lyon County, County Manager Jeff Page said they braced for a recession but realized in August their consolidated tax is doing “phenomenally well.”
“We attributed a large portion of that with the funding the government put out with stimulus funding and people spending that money,” Page said.
As such, the Lyon County Board of Commissioners on Jan. 21 approved a plan to augment their budget. This, he said, will lead to the county adding three deputy sheriff positions, support staff, and a community development director.
Moreover, part of the augmentation is putting $3 million-plus back toward capital improvements to build the Dayton Government Center as a “one-stop shop” for residents in west-central Lyon County, Page said.
Page also pointed that Lyon County’s unemployment rate has continually dropped since spiking near 20% in the first quarter of 2020. The latest data she had showed the county’s jobless rate being around 6%.
“What that means is people are going back to work or getting jobs, which is good news for everybody involved,” he said. “Hopefully, it helps keep the economy moving forward.”
Storey County Manager Austin Osborne said the county gave nearly 40% of its $750,000 in CARES Act funds to small businesses.
“We could not give that money away fast enough,” he added.
Other significant portions of the grant went toward telework, technology and schools (17%), EMS services (14%) and sanitation and social distancing costs (13%).
Home of Virginia City, Storey County’s saw a drop in tourism revenue during Q1 and Q2 of 2020, with room tax down 17% and dining down 35%, Osborne said.
While he said restaurants still operating at 25% capacity are “hurting really bad,” he noted that some retail stores have bounced back and are showing record profits.
“There’s less people coming to Virginia City, but the people coming here are locals and more inclined to spend money and help their small businesses,” he explained.
Looking forward, Osborne pointed out the county will see a boost in room tax with a total of 530 extended-stay hotel rooms or RV park spaces being built at the Tahoe Reno Industrial Center. So far, 100 rooms have been completed, he said.
With that in mind, Osborne said he sees commercial and hospitality development — from restaurants to truck stops to car dealerships — at TRIC as the “next wave” of economic development in the county.
He added that data farms and technology are also significant areas of growth in 2021 and beyond.
Mineral County’s areas of economic development emphasis are mining and tourism, said Mineral County District Attorney Sean Rowe.
He mentioned that the Isabella Pearl Mine, owned by Gold Resource Corp., continues its gold production and expansion, and the Ioneer-owned Rhyolite Ridge Lithium-Boron project in nearby Esmerelda County continues its permitting process.
Tourism-wise, Rowe said Mineral County saw a significant increase in the usage of its public campgrounds around Walker Lake in 2020.
“As California closed its state parks, everybody just kept driving this way,” Rowe said. “That was a surprising benefit we really weren’t anticipating until California made that decision.”
While many counties saw small business fold for good, Mineral County did not lose a single brick-and-mortar store during the COVID downturn, Rowe noted.