NLV asks for study of tax distribution formula’s fairness

North Las Vegas officials have argued for years that the city doesn’t get a big enough piece of the state’s tax pie.

But the city has failed in its many attempts to persuade legislators to tinker with the state’s method for giving tax revenue back to communities so North Las Vegas would get more.

This year, city officials are trying something different: asking the Legislature to conduct a study to determine whether the state’s tax distribution formula is fair.

They think anyone who takes a close look at the numbers will see that North Las Vegas gets shorted.

"We’ve been unfairly compensated for a long time," said Mayor Shari Buck.

Nevada’s consolidated tax distribution formula is the equation used to give allotments of state tax revenue back to communities in the state.

The tax pool is made up of six different taxes including the cigarette tax, liquor tax and a government services tax collected by the Department of Motor Vehicles at the time a vehicle is registered.

The taxes are distributed based on a complicated formula involving population and property values. Jurisdictions also receive a base amount that is adjusted according to the Consumer Price Index.

The idea is that each jurisdiction "would have a guaranteed amount they could work off every month," said Marian Henderson, management analyst for the state Department of Taxation.

North Las Vegas officials say the city was completely different when the current formula was devised more than a decade ago.

Buck said "the way the formula was drafted discriminates against" her city.

"We do not get the same amount per capita as other residents in the state," she said.

North Las Vegas’ population grew by 88 percent between 2000 and 2010, according to U.S. Census Bureau figures released Thursday. Its population surged from 115,490 to 216,960.

North Las Vegas received $18.1 million in consolidated tax revenues from July through December, according to the Department of Taxation. In comparison, Henderson, with a population of 257,730, received $36.8 million. Las Vegas, with a population of 583,760, got $103.9 million.

Other cities, including Reno and Fernley, also have been struggling because of unfair tax distribution, Buck said.

Because "everyone’s hurting" right now, North Las Vegas is not asking for changes immediately, said Dan Musgrove, a lobbyist for the city .

Instead the city, in Assembly Bill 71, is asking the Legislature to conduct a study of the tax distribution formula "during the 2011-2013 interim" to determine whether it is fair. Changes based on the study’s findings could then be proposed for the 2013 Legislative session.