Visitors chip in with locals on Carson City tax load
Carson City’s most recent city sales tax hike in the first year raised more than $1.1 million, with about $800,000 of it from residents’ pockets.
That’s based on the reported take of $1,113,530 from the tax boost’s inception on Oct. 1, 2014, to the end of September this year, plus application by the Nevada Appeal of an estimated 30 percent from visitors in the city making purchases. The Appeal used an estimate lower than the percentage tourism officials used. Joel Dunn, director of the city Visitors Bureau, uses a 31 percent estimate.
“I think our numbers are fairly consistent with what other communities are seeing,” he said, speaking of Nevada communities but leaving out the international gaming mecca of Las Vegas. Dunn also speculates the 31 percent figure from the Nevada Commission on Tourism is less than he actually believes is the reality, but said a conservative approach is best.
Mayor Robert Crowell, when he announced his bid for a third term a month ago, mentioned the one-eighth of a penny city sales tax hike adopted in 2014 and noted somewhat less than half of it would be supplied by visitors. He since cut back on that estimate, but still maintains whatever the amount is, it’s valuable to the community and city government in helping upgrade city appearance and opportunities for both visitors and residents.
“I think on any tax, or fee, you have to look at who it impacts,” the mayor said last week, a point at which he still had no announced opposing challenger.
“The sales tax is one where we’re blessed with a lot of people coming in here,” he said. He also said whatever percentage of the overall city sales tax take comes from visitors, it helps provide underpinning for bonds. Bonds are being used, for example, to do the infrastructure program stemming from last year’s tax boost.
Involved in the infrastructure projects are most or at least part of the funding for a multi-purpose athletic center, an animal shelter, upgrades of the downtown and in other business corridors, as well as eventually at the Carson City Community Center. The mayor and supervisors are set to vote Dec. 17 on the final design of the downtown makeover, next year’s first phase of the corridor improvements.
The athletic center, meanwhile, is nearly done and the animal shelter’s construction has started.
“You’re putting some of it on people who don’t live here,” said Crowell. He also indicated the city has maintained a solid bond rating.
City Manager Nick Marano said the overall sales tax revenue stream during the past year has been recording growth, when compared with the down days of the recession and its early aftermath. He, too, said solid city sales tax receipts may help provide general obligation bond prospects and help cope with problems such as the need for public safety vehicles for the Sheriff’s Office and Fire Department.
The Appeal, meanwhile, utilized information from city Chief Financial Officer Nancy Paulson combined with Dunn’s estimate of visitors’ spending in analyzing both the overall and the hike’s city sales tax impacts on residents.
A computation determined based on Paulson’s reported $915 million in taxable sales from October, 2014 until the end of September this year, the overall rate here of 7.6 percent raised a total of $69,540,000. Using the 30 percent visitors spending estimate means $20,862,000 of that came from tourist or visitor spending here, leaving about $49 million that came from community residents.
With a population of 55,000, that means the per capita out-of-pocket amount for the 12 months ending in September was $890 to handle the entire 7.6 rate. Obviously more and larger purchase meant some individuals forked over more than the per capita level, fewer and small purchases meant less in sales tax was paid. Vehicles accounted for some of the bulge as outsiders come here to buy, according to Michael Salogga, city business development official.
A 7.6 percent rate on a $40,000 sports utility vehicle, for example, requires $3,040 to shoulder the sales tax load.
In the 2010 census, there were more than 20,000 Carson City housing units, but not many more. With about 55,000 population and 20,000 units, that’s an average of 2.75 persons per unit, so the per unit sales tax burden for a 7.6 percent rate, leaving out visitors, was under $2,450 or well under the amount charged on a sports utility vehicle a visitor comes to buy.
Computations involving the infrastructure portion of the sales tax show the per capita cost of the one-eighth penny tax boost in its first year was about $14.50. The cost per housing unit, on average, was about $40.
City government doesn’t by any means receive all the sales tax receipts that come from the overall rate charged within the consolidated city-county. Some of it goes to the state, for example. Nor does it receive all of the property taxes raised in the community. Some of that, for example, goes to the school district.
In Fiscal Year 2015-16, property taxes are projected to raise about $22 million for city general fund operations while the consolidated tax, which is mostly sales tax, accounts for about $24 million in the general fund. The overall general fund portion of the budget adopted was nearly $68 million. The one-eighth of a penny part of the overall rate, however, is reserved only for infrastructure project financing.