Geothermal abatements hurt county’s taxable sales in May
Statewide taxable sales were up 6.1 percent in May to a total of more than $3.9 billion but Churchill County didn’t share in the growth because of the state taking money away because of tax abatements granted for green energy businesses.
It was a story similar to April when statewide sales increased 7.3 percent but Churchill County took a major hit due to the abatements, which were passed by the Nevada State Legislature to attract geothermal and solar energy projects to the Silver State.
Comptroller Alan Kalt said the tax abatements are having a chilling effect on Churchill County’s taxable sales figures, especially when geothermal construction is underway. Currently, he said construction is ongoing at the Patua geothermal plant 15 miles west of Fallon. Although the state reported the county gained 60 percent over the same period one year ago, Kalt said the information provided by the Nevada Department of Taxation is not accurate. He said the state reported taxable sales of $35,698,560 in May, but the state then took back a little more than $15 million.
Instead of a gain for the month, Kalt said the county experienced a significant loss.
“We had a $1.8 million loss or 8.4 percent decline in May,” he said.
Among the areas that saw huge reductions were in Utilities, Construction of Buildings, Heavy and Civil Engineering Construction, Special Trade Contractors and Electrical Equipment, Appliance and Computer Manufacturing. Kalt said taxable sales, for example in Utilities was listed at $10.36 million but the county lost $10 million to abatements. Specialty Trade Contractors saw a $1 million adjustment.
In looking at the May figures, Kalt said Food and Beverage Stores had a $20,000 decline from 2012 as did Food Services and Beverages. Kalt said the construction at Patua is also having an indirect effect on those two areas because he figures many construction workers are temporary living in Fernley. Kalt said Lyon County is showing significant increases in the same two categories.
Other reporting businesses in Churchill County are either reporting similar figures from May 2012 or modest declines.
Altogether, six of Nevada’s small counties reported strong double-digit gains in May. In Lyon County, the growth was 27.8 percent to a total of just over $33 million. Heavy Construction, Building Supplies, auto sales and the Food and Beverage categories all contributed substantially to the gain. Esmeralda’s taxable sales grew more than 58 percent, Humboldt’s by 46 percent, Mineral 28 percent, Nye 57.6 percent and Storey by 22.6 percent. Douglas County was up by 5 percent to $46.59 million. Clark County reported a 4.7 percent increase to $2.8 billion with strong performances in several building trades and construction categories as well as auto sales.
Washoe had an 8 percent gain to $501 million in May. Like Clark, Washoe had strong performances in a variety of construction categories, a 13 percent gain in auto sales.
Gross revenue collections for May were $308.1 million, a 6.6 percent increase over the previous May. The General Fund portion of that, which goes to the state, was $78.1 million — a 7.27 percent increase. That puts the General Fund portion just under a half percent ahead of the projections made by the Economic Forum and used to build the state budget.