Tax thrills, casino shills and Hilton chills


Last week's outcry about skyrocketing Reno-Sparks property taxes traces back 35 years. Some downtown Reno hotel-casinos had gone without reassessment since 1962 when the late, great Washoe County Manager Russ MacDonald imposed a computer-assisted appraisal program (CAAP) on the assessor's office in 1976.

Don Peckham and staff were hopelessly behind and far out of compliance with state law, which still orders properties reassessed at least every five years. MacDonald took the bull by the horns, impaling Peckham on one and me on the other.

My firm was hired by the three local governments to disseminate the good news (computerized efficiency) and the bad (resulting tax increases).

The three governments asked several PR firms to bid on the unenviable job of positively explaining it to the public. (Translation: save our assess politically.) I was the only guy dumb enough or hungry enough to show interest.

I did a masterful job of getting out accurate information via the media while doing so in such a manner as to keep people with pitchforks and torches from tarring and feathering assessor Peckham.

Unlike today, there was no mass outrage at a humongous tax increase. Where Peckham and his staff expected small arms fire, they got no more complaints than a normal year. (Anyone wanting to know just how I did it will have to pay an exorbitant consulting fee.)

That experience gives me credentials to address the causes of the current smell of tar in the air. The 1976 computerization and public relations may have smoothed ruffled feathers, but did little to solve the underlying problem of public outrage caused by real tax inequities. The system remains today more than ever biased against the little guy and in favor of big business.

The CAAP program was supposed to make last week's huge property tax jumps a thing of the past. Physical inspection would take place every five years, but computer comparison would annually factor values up or down, based on actual sales of similar properties.

Alas, Russ MacDonald's attempt at equity and efficiency was foiled later in 1976 when California passed Proposition 13, the Jarvis-Gann initiative.

In 1978, ole Howard Jarvis hisself came to Reno-Sparks to kickstart a stalled drive for a similar proposal. Nevadans overwhelmingly voted for it that year, but killed it in 1980 amid glowing promises from GOP Gov. Robert List that he had a better idea. He didn't.

His long-secret proposal involved a "tax shift" cutting property taxes by raising sales taxes, about 75% of which are paid by Nevadans. The 1981 "tax shaft" not only transferred a tremendous amount of the burden to low wage earners, it also mandated that most local revenues go to the state for legislative redistribution. This has caused great inequities and endless north vs. south "fair share" wars.

Unlike property taxes, sales and gaming revenues are unstable. During economic slumps, teachers and students have gotten seriously shortchanged. The tax shaft helped defeat List for re-election in 1982.

When the shaft passed, it also mandated a flaky new way of assessing residential property. The owner of a 75 year-old million-dollar mansion now pays far less tax than a family in a new entry-level tract home. Worse, the '81 tax shaft froze property valuations at 1978 levels, some of which still astoundingly dated back to 1962, giving a windfall to casino district fat cats. The tax money lost through assessment paralysis will never be replaced.

State control has resulted in an increasingly frustrating patchwork of user fees and special charges to fund growing municipalities. Washoe County residents pay one of the highest gasoline taxes in the country. Sales and fuel levies represent the worst sort of regressive taxation: the lower your income, the higher the percentage you pay.

Our earmarked empires make matters much worse. To promote casinos, property tax increases in Reno and Sparks downtown redevelopment districts go into the black hole of corporate welfare (more than $150 million so far). The impacts of new jobs created downtown are thus largely born by non-downtown dwellers forced to make up tax deficiencies for roads, parks, police and fire protection.

The Reno-Sparks Convention and Visitors Authority does much the same. For the past 37 years, it's skimmed hundreds of millions in room taxes to clumsily promote tourism and build mostly-inefficient facilities. The room tax was originally sold to the voters in 1960 as a way to fund parks and recreation, but no money went to local use for more than three decades.

Downtown gamblers fear the convention authority may approach insolvency next year. Then, Washoe County property owners will get stuck for the red ink, just as Al Davis and his aptly-named Raiders raped Oakland.

Big business does not have to suffer like homeowners. Computers or not, it's easy to develop information on recent sales of comparable dwellings. Hotel-casinos very seldom turn over, so they get assessed on market value based on profits. If profits dip, casinos get their taxes lowered. Last January, the Reno Hilton accomplished that trick to the tune of about $437,000 a year. John Ascuaga's Nugget scored roughly $100,000 annually beginning in 1995.

The chair of the Washoe County Board of Equalization dissented from the Hilton decision, stating that while the reductions may reflect the law, that doesn't make them fair.

Pile these local and state inequities onto a federal tax system which has likewise offset huge cuts to corporations with increases on individuals, and you begin to understand the misplaced anger of the Reno guy who snorted he's voting against the next school bond because his taxes went up. That's how we do it in this country. Penalize the grade-schoolers who can't vote.

It's time to re-direct that rage toward the right people.

POETIC JUSTICE DEPT. In perhaps an ominous omen for the Reno Hilton, the hotel's application for a carny thrill ride was turned down by planning commissioners last Wednesday. Ironically, Las Vegas Culinary Union CEO Jim Arnold was in town at the same time. What on earth could impel the leader of the largest union in the state to stay in Reno for three days?

My spies report that he was very possibly negotiating with Hilton top management. As I exclusively reported a few days ago at U-News, Arnold is making union recognition by the two northern Nevada Hilton properties a condition of a new contract for most major Las Vegas Strip hotels. That's a thrill ride poorly paid local workers will love to take.

Be well. Raise hell.


© Andrew Barbano
Andrew Barbano, a Reno-based syndicated columnist and 29-year Nevadan, is editor of U-News. Send an E-mail, especially if you want to join NAGPAC '98.
Barbwire by Barbano has appeared in the Sparks Tribune since 1988 and parts of this column were originally published 12/7/97.

Reprints of the UNR financial scandal newsbreaks remain available for the cost of copying at
Nevada Instant Type in Sparks and both Office Depot Reno locations.