In Carson: City 'very slow' to react to budget problems

Carson City has received worse sales tax reports over the last six months than both Washoe County and the state but has not announced major budget cuts like the other two agencies.

Washoe County blamed low sales tax numbers when it froze 5 percent of its budget in November and cut $12 million in December. The state pointed to the same problem when it called for major cuts in October.

At their meeting in February, supervisors might ask departments to cut between 2 and 5 percent from their budgets. A financial adviser told the city earlier this month it would be bankrupt in a year and a half if it didn't make major cuts soon.

"In my personal opinion, I feel the city was very slow to respond, and I'm not happy about it," said Mayor Marv Teixeira.

The city has known for months that the economy is slow.

Reports from the Nevada Department of Taxation from July to December show that Carson, Washoe County and the state had slumping sales-tax revenue. Carson City had worse numbers than Washoe and the state all but one of those months.

The most recent report, from December, said taxable sales in Carson were down almost 8 percent from October 2006 to October 2007. The state was down about 4 percent over that time and Washoe was down about 2 percent.

The city did order a temporary job freeze in October on about 40 open positions, but it filled over half of those within a month. A majority of supervisors said the jobs were "critical."

Positions that were unfrozen included sheriff's deputies and court workers, as well as an open-space program assistant and a part-time lifeguard.

The city has saved about $400,000 by leaving the rest of the open positions unfilled. Supervisors also voted earlier this month to use the city landfill to help fix the budget problems.

That will help correct the $3 million shortfall this fiscal year, but the city will have to cut more to prepare for the next fiscal year, which starts July 1, that is expected to be just as bad or worse.

Along with cuts, supervisors will consider fee hikes and a one-eighth of a cent sales tax at their next meeting. Teixeira said he will oppose any increases in fees and taxes because the city should make cuts like residents have.

The drop in sales taxes have hurt the city because they make up a large part of the consolidated tax, which is almost half of the city's main fund.

Though Carson City is not the only Nevada county that has not made major budget cuts yet, some, such as Storey County, have not been hurt as much by slow sales.

Storey County is on "solid footing" because of property taxes from the 104,000-acre Tahoe Reno Industrial Center, said County Manager Pat Whitten, and that helped the county recover from dips in sales.

The state and Washoe didn't have that kind of extra revenue, however, and knew they had to react to the drop in sales tax revenues, said representatives for both the Washoe County and Gov. Jim Gibbons.

Supervisors who have defended the board's actions have said sales-tax revenues are difficult to predict.

Dr. Eric Herzik, head of the political science department at the University of Nevada, Reno, said one urban Nevada area doesn't have more reason to be able to predict sales-tax revenue than another urban Nevada area.

Washoe County moved quickly after the state announced cuts, he said, and realized "this downturn is real."

- Contact reporter Dave Frank at dfrank@nevadaappeal.com or 881-1212.

Reports from the Nevada Department of Taxation

December report

From October 2006 to October 2007, taxable sales dropped 7.9 percent in Carson City, 2.1 percent in Washoe County and increased 4.3 percent in the state.

November report

From September 2006 to September 2007, taxable sales dropped 4.8 percent in Carson City, 2.2 percent in Washoe County and 1.5 percent in the state.

October report

From August 2006 to September 2007, taxable sales dropped 6.9 percent in Carson City, 3.6 percent in Washoe County and 5.7 percent in the state.

September report

From July 2006 to July 2007, taxable sales dropped 5.5 percent in Carson City, 4.1 in Washoe County and 2.6 percent in the state.

August report

From June 2006 to June 2007, taxable sales increased 4.5 percent in Carson City, dropped 3 percent in Washoe County and dropped 0.3 percent in the state.

July report

From May 2006 to May 2007, taxable sales dropped 9.8 percent in Carson City, 4.2 percent in Washoe County and 3.6 percent in the state.