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School district continues fight to avoid paying $19.5 million in Incline property taxes

By Bob Conrad

WCSD: 100 teaching positions on the line if they have to pay

Washoe County commissioners on Tuesday are scheduled to approve a report outlining how much the county has paid Incline Village property owners over a long-running property tax dispute.

The county treasurer said about $56 million is owed, which includes interest for overcharging property taxes. A district court judge in 2019 determined, after nearly 20 years of litigation, the county has to pay property owners for taxes collected plus the interest.

County documents show it has paid nearly $28 million to date. 

In the meantime, Washoe County School District, which is on the hook for almost $20 million, continues to challenge that amount owed. WCSD attorneys said the county, by levying that amount, acted illegally. It appealed after the district court judge said the district had to pay.

“As information about the Settlement Agreement began to become public and newsworthy, the District made repeated requests to the County for additional information and asked to participate,” WCSD attorneys wrote early this year in a court filing. “The County denied the District’s requests. The District was never a party to the … proceedings.”

School officials argue the $19 million it owes “presented significant evidence of harm.” It would mean, according to WCSD attorneys, the district would have to take from reserves and eliminate about 100 teachers from area schools to cover settlement costs.

“These numbers are even more divergent considering that the County’s general fund budget is only $350 million (26.5% of the budget), whereas the District’s reserve fund relates to a $500 million budget (10.4% of the budget),” attorneys claimed. “Based on these numbers, the County could pay for the entire Settlement Agreement and be left with the same ratio of fund balance as the District (approximately 10%).

“The District should not be deprived of $19.5m in vital funding due to the litigation decisions by the County,” they added.

The Washoe County District Attorney’s office is defending Washoe County against the school district in the appeal.

Deputy District Attorney Herbert Kaplan is handling the case.

“This is a unique situation caused by a series of mishaps, mostly on the part of the State, which was not anticipated by the Legislature,” he argued in response to WCSD. “While it is true that [state law] does not expressly provide for interest, the entire scheme in connection with refunds of overpaid property taxes cannot be clearer.”

Withholding money from WCSD “is necessary and implied to aid in carrying into effect the power expressly granted of collecting and distributing taxes,” he said. And that power is granted to the Washoe Board of County Commissioners. 

“WCSD seems intent on engaging in finger-pointing,” he continued. “Washoe County pursued the litigation as it deemed proper to defend the funds of the people of Washoe County. In fact, WCSD supported the County in the early stages of the litigation, filing an amicus brief … before this Court. 

“Thereafter, for whatever reason, WCSD sat by idly for those years, knowing that the equalization action, the refund required by law, and the statutorily mandated interest was possible.”

Kaplan further said WCSD has the opportunity to seek more funding but “chose not to do so.”

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