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September 1, 2014

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Henderson mulls property tax hike to fix ‘crumbling infrastructure’

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Henderson Mayor Andy Hafen speaks during a Henderson City Council meeting Tuesday, Nov. 29, 2011, in which the council unanimously appointed Josh M. Reid, U.S. Senate Majority Leader Harry Reid's son, to be the next city attorney.

Henderson officials are considering raising the city’s property tax rate by up to 20 cents to generate funds to cover a $17 million annual shortfall needed to maintain its infrastructure. But before any decision is made, city council members said Tuesday night they want to get extensive feedback from the public.

The issue: The city council heard a report from the special ad-hoc budget committee containing recommendations, including a property tax increase, to close the city’s annual budget deficit.

The vote: The motion to accept the report was approved unanimously.

What it means:

Despite cutting $127 million from the city’s budget over the past five years, a sizable deficit showing no signs of shrinking has Henderson officials seriously considering a property tax increase to pay for repairs and replacements to city streets, sewers, parks and buildings.

Anticipating the budget crunch, the city appointed a 21-member panel of citizens and business leaders to study the ins and outs of Henderson’s finances. That panel reported back Tuesday night, laying out the stark challenges facing the city while offering several recommendations to tackle the deficit.

The city’s operating general fund deficit of $2 million can likely be covered through less drastic measures, like raising fees at city recreation facilities.

But the city is also about $17 million short annually on its capital fund, meaning there’s not enough money to maintain what City Manager Jacob Snow described as a “crumbling infrastructure.”

To address the shortfall, the committee recommended that the council consider a property tax increase of up to 20 cents per $100 of assessed value, a move that would generate about $16.5 million per year in added revenue.

The council has statutory authority to raise the property tax by up to 3 cents immediately, but any further increases would have to be approved by voters at the ballot, likely during the 2015 municipal elections.

Henderson’s property tax rate is currently 71 cents per $100 of assessed value, the lowest of any city in the valley. The full 20-cent increase — an extra $122.50 per year on a home valued at $175,000 — would still leave Henderson’s rate lower than Las Vegas and North Las Vegas.

Mayor Andy Hafen emphasized Tuesday that the city council has not made a decision about a property tax increase and that he wants citizens to weigh in on the proposal in the coming weeks.

“There’s a lot to digest here,” Hafen said. “I want everybody to get as educated as they can (on this).”

Councilwoman Gerri Schroder said maintaining the city’s streets, lights and other infrastructure is a quality of life issue that needs to be funded adequately.

“People have this misperception that this is going to go to the police (department) and fire (department) and to give people raises. This has nothing to do with that,” she said. “These recommendations are strictly to ensure the lifestyle of the people who live here; that where they live, what they see, what they take for granted every day is pristine.”

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