‘Green’ buildings already proposed would cost near $1B
If all nine projects proposed in Clark County qualify for sales and property tax breaks under the 2005 “green building” law, the state, local government and school districts would be out $974.3 million over the next 15 years.
Those estimates were presented Friday to a joint meeting of the Assembly and Senate Commerce and Labor committees. Legislative economist Russell Guindon told the committees that is the best estimate he and other fiscal experts could provide since some of those projects may not get built and others could be changed substantially.
The figures were presented as part of a presentation of proposed amendments to that law lawmakers will work on over the next week. No one anticipated the huge projects, which would apply for the tax breaks when the law was passed. If businesses are willing to build energy-efficient buildings, the law exempts them from all but the 2 percent base of Nevada’s sales tax on all construction materials, furnishings and fittings. And it allows them to claim a property tax break of up to 50 percent for up to 10 years.
The sales tax and property tax are major sources of school district and local government revenues. The state gets hit financially because it is legally required to make up any revenue shortfall suffered by the school districts.
According to the figures presented Friday, the total estimated loss in sales tax revenue if all nine Clark County projects that have filed for the tax breaks are built would be an estimated $297.1 million split between Clark County School District and local governments in that county. The state would have to make up the $116.25 million the school district would lose.
Guindon told the committees the big hit is the property tax revenue – a total of $642.5 million. One project – MGM’s City Center project – accounts for $240.7 million of that total since the total cost of that project is $7.4 billion.
City Center, the Fontainebleau, Sands Palazzo and Echelon Place, according to Taxation Department records, have already been issued letters saying they qualify for the tax breaks. Five other projects are in various stages of the certification process.
It isn’t clear whether some or all of those projects will eventually qualify under the 2005 law.
• Contact reporter Geoff Dornan at email@example.com or 687-8750.