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You are here: Home / News / Proposed sales-tax increase for school construction heading to voters

Proposed sales-tax increase for school construction heading to voters

February 17, 2016 By Sparks Tribune Leave a Comment

Washoe County voters will be asked at the November general election to approve the highest sales-tax rate in the state to generate $781 million for school construction and repairs.

A question on the election ballot will seek voter approval of a 0.54 percent increase in the county’s sales-tax rate to fund a variety of construction projects to relieve overcrowding in Washoe County School District schools and to address repair needs.

A committee independent of the school district unanimously decided last Friday that the ballot measure will only deal with a sales-tax hike. Committee members rejected another option that would have asked voters to approve a smaller increase in the sales tax combined with a hike in property taxes calculated to raise the same $781 million amount.

A question dealing only with sales taxes has a better chance of passing, some committee members said, because of the strong opposition to raising taxes on property.

Committee member Dylan Shaver said a sales-tax increase is “easier to explain” and “easy for voters to wrap their heads around.” Another member, Todd Koch, agreed with the assessment even though he said he has concerns because the sales tax is regressive, meaning it hits poor people harder than those with higher incomes.

If voters approve the measure, Washoe County’s sales-tax rate would jump from 7.725 percent to 8.265 percent, the highest in state, exceeding Clark County’s rate of 8.150 percent.

For every $1,000 in purchases subject to the tax, the increase would amount to an additional $5.40. Nevada law exempts some goods from the sales tax, including groceries, prescription drugs, newspapers, gas, electricity and water. Nearly all services also are exempt. Typical items that are taxed include clothes, electronics, cars, furniture and household goods.

Now that the committee has decided the ballot question will deal exclusively with a sales-tax increase, it will shift to another issue before wrapping up its business: whether the tax increase, if approved, will sunset or expire once it generates the funding target of $781 million or will it continue indefinitely. The $781 million is designed to finance projects over a nine-year period.

Some committee members indicated it’s not an issue because the additional tax revenue will be needed far into the future to meet an ever-growing number of students and to cover the extended time it takes to issue and pay off bonds for construction projects.

Experts in public financing said that allowing the tax increase to expire would hurt the ability to sell bonds because investors want assurances that the bonds will be paid with a stable source of revenue.

The committee plans another meeting to discuss the “sunset” issue.

The ballot question stems from a bill passed by the state Legislature and signed into law last year. The legislation authorized the formation of the committee, formally called the Public Schools Overcrowding and Repair Needs Committee. The committee, under the legislation, was given the option to propose increases in taxes applying to sales, property, car registration, hotel rooms and real-estate transfers.

The committee, chaired by former Sparks City Manager Shaun Carey, has members representing the Legislature, local government entities, the PTA, business and labor organizations and the teachers union.

The school board, which has come under criticism for violations of the open meeting law and for its approval of a new employment contract for Superintendent Traci Davis, has formed another committee in a bid to separate the school district from the effort to raise revenue for new schools and renovation projects.

The board voted unanimously to create an advisory committee of community members that will review spending on construction and repairs and make recommendations to the board, which, by law, must have the final say on expenditures. The advisory body will be made up of officials from Washoe County, the city of Sparks, the city of Reno, a representative of the gaming industry and people with experience in engineering and the financing and construction of public-works projects.

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