The City of Reno’s two proposed legislative measures are receiving a lot of pushback. Private citizens, professional organizations and other government entities—including Washoe County—expressed opposition to the bills during aSenate committee meeting Thursday, March 4. Senate Bill 11 and Senate Bill 73 both seek to allow the city to raise taxes.
SB11 would allow the city to impose a governmental services tax (GST) on automobiles in Reno of one cent per dollar value of the vehicle when registered each year. City officials have said the funds would be used to aid the unsheltered.
The city is seeking the authority to impose the GST, though normally it is a tax revenue source only available to counties. City of Reno officials have said that because the county has thus far refrained from implementing the tax, the city should be allowed to.
SB73 would allow the formation of a committee to consider how best to raise money for parks and open spaces in Reno through a number of possible taxes. The committee’s recommendations would have to be approved by voters in 2022.
Washoe County hasn’t imposed GST—yet
Jaime Rodriguez, head of government affairs for Washoe County, called to provide testimony in opposition of both bills during a March 4 Senate Committee on Revenue and Economic Development meeting.
In regard to SB 11, Rodriguez said, “The county is not opposed to implementing this tax. We want to make sure we use these when they’re most appropriate.”
City of Reno staff noted that Washoe County would still be allowed to collect the GST on vehicles registered in unincorporated areas of the county even if the city were to collect it on vehicles within its jurisdiction. However, Rodriguez pointed out to legislators that a tax collected only in unincorporated parts of the county could not be put toward use on regional projects—which efforts to address the needs of the Truckee Meadows’ growing unsheltered population are.
Regional efforts to help the homeless are funded through the City of Sparks, Washoe County and Reno. Last year, Reno used CARES Act dollars to purchase the land where a new so-called “super shelter” is located.
Rodriguez also pointed out that while the City of Reno made the largest investment in the purchasing the land at the old Governor’s Bowl and getting construction underway on the Nevada Cares Campus, the county will be responsible for funding 60% of its ongoing operational costs. Having the ability to collect the GST for the entire region could help Washoe County offset those costs, or others.
The Nevada Department of Motor Vehicles estimated that if Reno were to implement the GST it seeks authority for, the city could expect around $9.2 million annually in revenue from the tax.
The cost of SB11 to individual vehicle owners has confused many people who’ve read about the bill. Assuming a charge of one cent per one dollar of value, people jump to the conclusion that registering a $20,000 car would cost an extra $200. However, under Nevada Law, the DMV valuation of a vehicle is based on 35% of its retail price. So, registering a brand-new vehicle of that value would cost an extra $70. As vehicles age, their valuation also depreciates until it reaches a minimum of 15%.
Legislators on the senate committee asked the city’s representatives to provide additional information prior to an as yet unscheduled work session on the bill—including information about how many vehicles are registered in the city and what the city’s plans might be were it only allowed to collect one half of one cent per dollar valuation on vehicles.
Legislators also raised concerns that the wording of the bill seems to direct tax money raised into the city’s general fund—where it would not be obligated to go toward the promised cause.
City GST garners little support
Former Assembly member Skip Daly called in support of SB11, saying if the county would not use the tax available to it the city ought to be allowed. His was followed by dozens of calls in opposition to the measure. No one called in with neutral testimony.
“It’s incredible that during this economic crisis the City of Reno would be seeking to raise taxes.”
The bill was opposed by representatives from the Northern Nevada Building Trades, the Las Vegas Chamber of Commerce, the Nevada Franchised Auto Dealers Association, the Nevada Trucking Association, the Nevada Taxpayers Association, the Reno-Sparks Chamber of Commerce and others—including several right-wing groups.
Janine Hansen, president of the conservative Nevada Families for Freedom group, spoke about the “hidden taxes” her organization believes people pay. She told legislators, “It’s incredible that during this economic crisis the City of Reno would be seeking to raise taxes. … Don’t allow the City of Reno to further harm their citizens by imposing this additional tax during this time of economic downturn.”
Lynn Chapman, vice president of the conservative Nevada Eagle Forum, told legislators she’d heard that Mark Twain once said the difference between a taxman and a taxidermist is that the taxidermist leaves the skin.
Public commenter Patricia Stewart said she was disturbed while listening to the hearing to learn that City of Reno staff didn’t know off the top of their heads how many vehicles would be affected by passage of the bill. Bruce Parks said there would be a mass exodus of residents from Reno should taxing continue to go up in the city and called the current Reno City Council the most “fiscally irresponsible” body he’d ever seen.
“My family, who lives in California, has this same exact bill on them, and they are paying so much more money for everything they need in California. And now we want to follow a failing state?” asked commenter Gina St. Ores. “I’m barely, barely able to make my budget work. I’m burning scrap wood to keep my house warm during the day.”
Provisions narrowed in bill to fund Reno parks
The city’s other bill proved nearly as unpopular. SB73 has been amended several times by the city since its introduction and received five calls to provide testimony in support of it.
Legislators on the Senate Revenue and Economic Development committee, which will eventually hold a work session for the city’s bills, also had a number of questions about the bill.
The bill initially sought to open up myriad tax options to the City of Reno to fund capital projects and ongoing operations costs for its parks and recreational facilities and to preserve open space in the city and protect the Truckee River—as well as to pay principal and interest on bonds issued for those purposes.
The amendments removed transient lodging taxes, sales tax and the reallocation of revenue from the Truckee Meadows Flood Authority from the list of possible funding mechanisms to pay for parks. Remaining on the list are a supplemental GST, real property transfer tax or property tax.
City of Reno staff explained that parks improvements have been a priority for the city for several years now. An overwhelming majority of Reno residents surveyed during the creation of the city’s 2017 master plan cited access to outdoor activities as a priority for improving quality of life in the city.
Understaffing was cited as one challenge for the city’s parks. City of Reno Director of Parks and Recreation Jaime Schroeder said her department has about half as many full-time employees as it would need just to sufficiently maintain the city’s current number of parks.
Schroeder also noted that parks improvement projects, like upgrading outdated playground equipment, are difficult to fund. The parks department accounts for 5% of general fund spending by the city annually, she said.
Legislators and citizens have questioned why Reno and other cities have not used the legal framework laid out in a bill that passed in 2017 to allow the creation of “parks districts” to fund parks maintenance and improvements. City of Reno staff has said on multiple occasions that concerns over creating “another layer of government” in the form of a park district and the body to govern it has been a major concern that has prevented the city from taking this approach.
While the list of possible tax revenue sources has been narrowed in SB73, legislators noted that the bill still doesn’t specify rates for any of the remaining tax options that would be under consideration.
Opposition to SB73 came from many of the same organizations and people who also oppose SB11, including the Las Vegas Chamber of Commerce and Washoe County, as well as the conservative groups of Chapman and Hansen.
Bruce Parks, whose earlier opposition to SB11 referred to the city council as fiscally irresponsible, told legislators that citizens do not want to pay for parks that are used mostly by unsheltered individuals.
“I’ve been in combat zones that are friendlier than those parks because of the homeless situation,” he said. The legislators have yet to set a date for work sessions on the two bills.
*Updated: This article has been updated to correct an error that stated SB73 received no testimony in support. Additionally, Skip Daly is a former Assembly member.