Why Yes on increasing Gas and Sales Tax ?
At the October 5th County Commission meeting, the addition of a five cent per gallon gas tax and a .25 percent sales tax cleared their first hurdle. The potential projects funded by those dollars will be considered at the Commission's Lake meeting on November 19th and both items will come back for their second reading in the Valley on December 3rd.
This Chamber, along with the Towns of Minden and Gardnerville, the Gardnerville Ranchos GID, the South Tahoe Association of Resorts and the Lake Tahoe South Shore Chamber of Commerce will continue to advocate for both increases.
In coming to this position, your Board of Directors had to answer a number of questions and had to have a 'yes' answer to each of these questions.
Do we need it?
Every project identified as a recipient of monies raised by these increases has been identified as a priority in one or more officially adopted County plans, all of which were thoroughly vetted and approved unanimously by the County Commission. The funding raised for regional road maintenance will be used to address the enormous backlog of deferred maintenance and every day that goes by, the cost of getting those roads (Waterloo, Centerville, Jack’s Valley, Buckeye and others) back to good condition goes up.
Can it be leveraged?
In the case of the increases in sales and gas tax, those dollars can be used to pay for revenue bonds, increasing the leverage of the money collected by a factor of ten. The money, either that collected by the increase or the amount raised by bonding, can then be used as match money, typically 20% of a project’s cost, to receive state and federal grant funding for the other 80%.
Will it be fair?
In the case of the sales tax, the amount of the increase, one-quarter of one percent, is determined by behavior, by how much residents and businesses spend on taxable goods. Similarly, the impact of the gas tax increase at five cents per gallon, is determined directly by the amount of fuel purchased. If you drive a lot, you use the roads a lot and you will pay more. In both of those cases, a considerable portion of the tax will be paid by consumers who are not residents of Douglas County (for example, visitors shopping and dining in Lake Tahoe and the Topsy Lane area, and those buying gas here who are just passing through).
Can it be redirected?
In past instances, revenue raising ordinances have been passed for one reason and then the funds redirected to other areas of the County budget. Each of the two ordinances being proposed contains language that will not allow this to happen in the future.
Is it the right time?
Given that we have only recently emerged from the ‘Great Recession’, this is perfectly reasonable question to ask. Can we be sure that these taxes will not put an unendurable burden on residents and businesses should the economy suffer another setback? Nothing is 100% certain, yet economically, we are seeing good numbers being produced in all of the financial sectors (Home values, retail sales, unemployment) that are back to the 2007 levels. If we don’t do it now, while these indicators are rising, there will never be a 'right' time.
Is there ROI (return on investment)?
There most certainly is. Fixing the roads now saves us the increased cost of fixing those roads later, not to mention the amount being spent on new tires, front end alignments and other vehicle problems made worse by the state of the roadways. Making the Hwy 50 revitalization program (the Loop Road) a reality will increase room rates and occupancy rates in the Hotel/Casinos at the Lake, along with increasing the amount of customer spending in gaming, food and beverage, and retail. The Hwy 395 revitalization has been identified as a mandatory element in improving the business climate in both of our downtowns. The proposed Ranchos Trail, while providing a significant amenity has to have a positive impact on property values of homes in that area. There are an almost endless number of ways to view the positive economic impacts of these projects.