Factions dig in on water-system funding

On a dusty desert road, a heavily financed gunslinger who can afford television and radio advertisements is facing down an opponent armed only with newsletters and word-of-mouth campaigning.

If Clark County's advisory quarter-cent sales-tax initiative to pay for improvements in the water system were a gunfight based on campaign spending, a coalition of business and labor interests would be the one left standing.

But a loose coalition of senior citizens, environmentalists and anti-tax advocates hopes to dodge the bullet by turning public opinion their way.

Voters on Nov. 3 will be asked whether the nonbinding Question One sales-tax plan should be recommended to the Clark County Commission. Proponents argue that the proposal to increase the sales tax to 7.25 percent is the fairest way to pay for improvements in water delivery and wastewater treatment. Opponents suggest the better way is to have new growth pay for the improvements through higher residential and commercial hookup fees.

Anyone looking to gauge public opinion on this issue would be better off sticking a wet finger into the wind. An early October poll conducted by the Las Vegas Chamber of Commerce, which supports the initiative, found that 60 percent of the 400 residents contacted backed the proposal. A poll conducted about the same time by the Las Vegas Review-Journal found only 39 percent of respondents in support.

Proponents of the tax plan, calling themselves Nevadans For Solutions, plan to spend about $340,000 on their campaign. The money has come primarily from home builders and developers, although supporters also include the Nevada AFL-CIO, Nevada Resort Association and Nevada Taxpayers Association. Through mid-August, the biggest contributors were the Bellagio hotel-casino ($25,000), Del Webb Communities ($25,000), Lewis Homes of Nevada ($24,000) and American West Homes ($11,000).

Expect to see television and radio ads in favor of the sales-tax increase up to election time, said Kara Kelley, senior vice president of the chamber.

"It's a more stable funding source," she said. "If we continue to fund this multibillion-dollar water project simply with water rates and connection charges, we'll eventually slow up as a community. And when communities don't grow, the water rate will have to bear the entire burden of the cost.

"A sales tax would stabilize that a little bit and provide for a better (construction) bonding rate because you have a better revenue mix. Another strong argument is that tourists would pay one-third of the sales tax."

But opponent Ken Mahal, president of the Nevada Seniors Coalition, argued otherwise. Similar to fellow organizations that oppose the sales-tax increase, Mahal's group is relying on its own newsletter to get its message out.

"Why are they promoting extra taxes when they have more money than they know what to do with?" Mahal said of the water district. "If this is a capitalistic society, which I believe it is, when you need a service you should pay for it. Our position is that new services should be paid through the hookup charges."

The proposal is to raise $3 billion -- $2.3 billion from local water users and $700 million from tourists -- by the year 2025 to pay for improvements in drinking-water and wastewater systems. The money would pay for increased system capacity, including pipes and pumps.

An ozone-treatment facility would be added to enhance Las Vegas Valley's drinking water. That state-of-the-art unit would eliminate virtually all organisms, including cryptosporidium, a one-celled parasite that killed 43 Southern Nevadans in 1994.

The sales-tax increase wouldn't apply to groceries, rent or prescription drugs, but would be used at restaurants and on nonfood items ranging from automobiles to baby diapers. That's no comfort to Assemblyman Harry Mortenson, D-Las Vegas, who opposes the measure. He disagrees with proponents who say that lower-income residents would pay less for water if the sales tax were raised.

"The poor are still worse off because sales tax hurts the poor more than the rich," Mortenson said. "That's why the sales tax is called a regressive tax."

Mortenson said he believes the ballot measure is biased the way it's worded. He also calculated that if the sales tax were increased, current homeowners would be paying 31 percent of the water-system improvements through higher water fees. They would be paying only 16 percent if the measure were to fail, he said.

"The public deserves an honest and balanced presentation of how they will be affected by a tax increase," Mortenson said.

He calculated that tourists would pay for only about 7 percent of the improvements with a sales tax hike. But Joe White, financial services manager for the Southern Nevada Water District, said he used complex formulas based on visitor spending patterns for food and beverages, shopping and transportation to come up with the "conservative" estimate that they pay about a third of the sales tax.

In 1996, for instance, he calculated from sources that include the Las Vegas Convention and Visitors Authority that the average tourist spent $199.68 per visit on taxable items. Based on more than 29.6 million visitors that year, he estimated that they contributed $5.9 billion, or 37 percent, of the $15.6 billion in taxable sales revenue. Likewise, White also estimated that residents contribute roughly one-third of the sales tax, with businesses paying the balance.

The Southern Nevada Home Builders Association, which backs the measure, estimated that water-hookup fees for new homes would skyrocket from $3,400 to $28,000 if the sales tax isn't increased. The hookup fees would still rise to about $11,000 per new home even with the tax increase.

The Nevada AFL-CIO is encouraging its 85,000 Clark County union members to support the measure. The labor organization planned to get out the vote through a mailer to its members.

"We think the water bills are going to go up quite extensively if they don't pass the measure," Claude "Blackie" Evans, the organization's executive secretary-treasurer, said. "We think the tourists should pay for some of this."

Another supporter, Nevada Taxpayer Association Director Carole Vilardo, said increasing the sales tax would allow water rates and connection charges to remain "as low as possible."

The 24-member citizen's advisory committee that developed the ballot measure initially recommended that new growth foot 79 percent of the bill for water-system improvements, with existing ratepayers responsible for the remaining 21 percent. But Mortensen noted that special-interest groups such as the casino industry and developers exerted pressure that caused the committee to revise its position and recommend the sales-tax increase.

Like Mortenson, fellow opponent Rick Nielsen of Citizen Alert said he doesn't think the ballot measure was "well thought-out." The executive director of the environmental watchdog group said he isn't even certain that all proposed improvements are necessary.

"There are certain parts of it, like getting water to new areas, which is needed, but some of the money would pay to increase our capacity for new water that we have no rights to," Nielsen said.

"If you run more water through the system, you're also returning more (treated) wastewater to Lake Mead. You could be adding contaminants at a higher rate back into the lake."

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