OPEN FORUM: Incorporation and Taxes…

It’s a widely held community fear that if Moapa Valley incorporates we will have to bear the financial burden ourselves. What will we do? We don’t have a large commercial base, casinos, or industrial base to support a city. I don’t have all the answers, but I desire to share my insights on this topic.

If the community becomes an incorporated area, we do not need to become a Mesquite, or a Henderson to make it work. Nor do we need to provide sales pitches to businesses and tourists about our area in order to increase a tax base.

There are several geographic areas that have incorporated and have retained a small town lifestyle. These include: Boulder City, Kanaraville, Enterprise, Kanab, and LaVerkin.

The closest to home would be Boulder City. Boulder City controls the number of annual building permits issued each year, an item this community may consider. My point is that we can become an incorporated area and not turn into a Henderson or a metropolis. We will need leaders that can plan growth around striving to maintain a small town feel and rural lifestyle.

If the community incorporates, the largest source of revenue for the city’s new operating budget will come from a consolidated tax distribution allotted monthly to the community. This is a general state fund that was established to help local governments. Had we been incorporated last year, our allocation would have been $70,000 a month or $845,789.91 over the fiscal year for the city’s operating budget (Statistics taken from the Nevada Department of Taxation). I don’t know exactly what amount this would contribute to the cities operating budget, but I assume it would be about 40-60% of the budget.

In 2000, the University of Nevada Reno provided a study titled “Legal And Economic Considerations For Incorporation Of Nevada Towns”. This can be found at<“www.cabnr.unr.edu/uced/Reports/Technical/fy2000_2001/2000_01_02rpt.pdf.”

I would suggest anyone interested in learning more about incorporating to review this document. It is very insightful regarding the pros and cons of incorporating a rural area. In this study, UNR compares the operating budget of unincorporated towns to incorporated cities. Such comparisons are the city of Carlin (2680) [population] to the town of Minden (2400); city of Lovelock (2880) to the town of Gardnerville (2780); city of Yerington (2870) to the town of Tonopah (2760); city of Elko (19,760) to the town of Pahrump (18,790).

According to the mentioned study, the property taxes for the unincorporated towns were 21% of their total revenues. Incorporated cities from the study had property taxes at 9% of their total revenues. This shows that a city’s operating budget relies less on property taxes than other sources of revenue. Whether this would be the same for our community is still unknown.

The community’s current tax rate is 2.5191%. This means that per $100 assessed value of property, we pay $2.5191 of that $100 to taxes. Through the Nevada State Tax rules, the tax rate can not exceed $3.64 per $100 assessed value. Realize that this is based on the counties assessed value, not what you think your property is worth. Compare the following other areas in the county and their property tax rates: Mesquite (2.7661), Laughlin (3.3407), Henderson (2.8973), Coyote Springs (2.7374).

I do not have the expertise to say exactly how our property taxes will be affected if the community incorporates. The method to discover this is to initiate the incorporation process. The property tax consequences will be analyzed. The proposed new property tax will be made known.

As a community we can decide if such a cost is worth governing ourselves. We will also need to analyze the benefits of governing and planning the future of our Moapa Valley rather than rely on outside government and how the county plans for the future of their Moapa Valley.

I believe that the benefits to incorporate would outweigh the increase in taxes that may come. It is foreseeable that an increase will come, but property taxes will not be the sole revenue for the new city. The tax impact will likely be smaller than you anticipate.