Las Vegas Sun

March 28, 2024

Water project got Southern Nevada’s tax talk flowing

Talks about raising taxes to meet Southern Nevada's growth needs began with the Integrated Resource Plan Advisory Committee.

The group of 21 community leaders was appointed by the Southern Nevada Water Authority to discuss how to pay for the region's water needs.

Those roundtable discussions about the community's water and sewer needs are the wellspring for examining other public service needs for the next decade, estimated at $3-8 billion.

The gaming and development industries are pushing for a tax package to present to the Legislature in 1997 that would finance those needs.

State demographers have noted a strong correlation between the number of hotel rooms and the total population in Clark County -- about 10 people for every room. The county has 105,000 rooms and anticipates adding 35,000 rooms by 2000.

Using the demographer's yardstick, Clark County's population will grow by 350,000 people by that time -- more than a third of its current population of 1 million.

Nick Braybrook of the water district said water use will increase proportionally. By 2000, the district expects customer usage hovering between 450-500 million gallons per day -- in Las Vegas and the unincorporated county only.

Anticipating that growth, the water district is undergoing an expansion that would allow it to draw 600 million gallons a day from Lake Mead by 2000.

Water officials estimate that $2 billion is needed in new pipes, treatment plants and pumping stations to make sure water comes out every time someone turns their tap. Sanitation district officials estimate another $1.6 billion will be needed to expand the sewage system to match the water system's expansion.

Where the money comes from to pay off the bonds used to finance those projects is a major concern for the committee, since the water authority can only turn to water rates and connection charges for revenue.

Carey Casey, finance manager for the water district, said some scenarios show connection fees could go as high as $28,000 per home by 2025 based on current charges approved through 1998.

"At that rate, you wouldn't have any affordable housing," said Carole Vilardo, executive director of the nonprofit Nevada Taxpayers Association.

To meet the immediate water and sewer needs, IRPAC members have discussed a mix that includes an excise tax on water and a quarter-cent increase in the sales tax, Vilardo said. A quarter-cent sales tax increase would generate $30 million in additional revenue a year, she said.

Talks have also included expanding the sales tax base to include services.

Other possible revenue sources include real estate transfer taxes, and broadening the property tax base from 35 percent on assessed value to 40 percent or higher.

Lewis Homes President Robert Lewis, a member of the IRPAC committee, said the goal is to find something that doesn't affect any one industry adversely.

"Sometimes people look for quick and easy solutions, and our industry is hurt real bad on things like connection fees," Lewis said.

"If you drive up the cost of housing, you're trading problems. If you raise money for one thing, but now create a lack of affordable housing, are people going to have to pay higher wages to attract employees into town?"

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