Barely noticeable sales tax increase is paying dividends for community
When the Clark County Commission voted this week to extend a sales tax increase it approved in 2019, many local residents may have thought, “Wait, there was a sales tax increase?”
Indeed there was — but just one-eighth of a cent. If you didn’t notice paying it, you weren’t alone.
Yet that diminutive tax increase is generating millions to address several critical needs in our community, which is why we applaud the commission for extending it beyond its original expiration date of January 2022.
State lawmakers voted in 2019 to authorize county commissions to bump up their sales tax by up to one-quarter of a cent toward a specific set of purposes, including supporting public schools and early childhood education, reducing truancy, providing more affordable housing and addressing homelessness.
County commissioners voted that year to take the option, but at only half the allowable amount, and the increase went into effect in January 2020. To date, it’s generated more than $10 million for affordable housing and $23 million for programs to reduce homelessness, plus millions more to address truancy and boost early childhood education. The revenue also has been used to support workforce training.
By the end of June, officials say, the extra tax will have generated $69 million.
Adopting it was a wise decision then, and it took on greater importance when COVID19 struck. Thank goodness we were already addressing such issues as homelessness and affordable housing as the pandemic ran roughshod over our economy and forced thousands of Las Vegas residents out of work.
Sadly, when commissioners signaled last month that they were leaning toward extending the increase, some critics accused them of being tax-happy and of never intending for the tax to be temporary when they approved it in 2019. The commissioners didn’t let the criticism deter them, which is to their credit.
As far as being tax-happy, keep in mind that Clark County’s overall sales tax rate of 8.375% is well in line with such regional neighbors as Phoenix and Denver. In addition, let’s not forget that the commission approved only half of the allowable taxation originally, so it’s had less of an impact on consumers. And in adopting the extension, the board continued to ease its impact by declining the option of tacking on an extra eighth of a cent — in other words, bumping up the increase to the full quarter of a cent authorized by the enabling legislation. That was a judicious action, but we’d encourage commissioners to keep that option in the back on their minds as the community sorts through the aftereffects of the pandemic.
Anti-tax critics also fail to take into account the urgency of addressing the community’s needs.
Take homelessness. County officials reported that more than 6,000 people are homeless in Southern Nevada on any given night. And even with the funding generated by the sales tax increase, a multijurisdictional committee reported to county and city leaders last fall that the region was facing a $342 million annual shortfall to effectively deal with homelessness.
Meanwhile, the Nevada Housing Division estimates that Clark County suffers from a shortage of more than 160,000 affordable housing units in Southern Nevada. Dealing with that issue is critical to the future growth and prosperity of Las Vegas and the entire state of Nevada, where our economy hinges on the ability to attract and retain the working-class families who form the backbone of our tourism industry. It’s vital to ensure that those families can live here comfortably.
Measured against those needs and others being funded by the tax increase, paying an eighth of a penny more in sales tax has been an important investment in our community. The fact that it’s been scarcely noticeable makes it all the better.