STATE OF NEVADA DEPARTMENT OF TAXATION 4600 Kietzke …

BRIAN SANDOVAL Governor

ROBERT R. BARENGO Chair, Nevada Tax Commission

DEONNE E. CONTINE Executive Director

STATE OF NEVADA

DEPARTMENT OF TAXATION

Web Site:

1550 College Parkway, Suite 115 Carson City, Nevada 89706-7937 Phone: (775) 684-2000 Fax: (775) 684-2020

LAS VEGAS OFFICE Grant Sawyer Office Building, Suite1300

555 E. Washington Avenue Las Vegas, Nevada 89101 Phone: (702) 486-2300 Fax: (702) 486-2373

RENO OFFICE 4600 Kietzke Lane Building L, Suite 235 Reno, Nevada 89502 Phone: (775) 687-9999 Fax: (775) 688-1303

HENDERSON OFFICE 2550 Paseo Verde Parkway, Suite 180

Henderson, Nevada 89074 Phone: (702) 486-2300 Fax: (702) 486-3377

March 15, 2016

FINAL LOCAL GOVERNMENT REVENUE PROJECTIONS FISCAL YEAR 2016-2017

Enclosed are the FINAL REVENUE PROJECTIONS FOR THE 2016-2017 FISCAL YEAR.

Please be reminded that these Final Revenue Projections for FY 2016-2017 do not reflect any of the effects of abatements on property taxes. The Department recommends that each local government entity which receives property tax monitor its property tax revenues closely; and adjust its budget projections accordingly. Note we have provided an additional worksheet Titled "FY16/17 NPM Annual Projection" which reflects the Carry Forward Payment that will be applied to the NPM taxes due, and the anticipated distributions to State and County.

NRS 361.4535 requires the Department to provide a projection of the property tax revenue for the upcoming fiscal year on or before March 25th. The Department expects the information contained in the March 25th report on projected property taxes will be useful for budgeting purposes because it will be based in part on the total expected amount of taxes after abatement for each existing property on the secured and unsecured rolls, as well as centrally assessed properties. Please see attached explanation about this year's tax cap.

The information on property taxes contained in this packet may be useful with regard to establishing tax rates for funds with specified revenue dollar amounts and for establishing the maximum allowed tax rate pursuant to NRS 354.59811. Please be advised that you should take into account the effects of abatement.

Sales and Use Tax revenue has shown some improvement over the last 12 to 18 months, however the Department still believes it is appropriate to continue to take a conservative approach. Overall, statewide sales tax has been projected to show an estimated growth of 4.41% for Fiscal Year 2015-2016 and an increase of 3.16% for Fiscal Year 2016-2017.

Please feel free to contact us if you have any questions regarding these projections. We are here to assist you in understanding not only the amount of projected revenue for your local government, but also the underlying assumptions and calculations used to construct the projections. Our telephone numbers and e-mail addresses are listed below.

LOCAL GOVERNMENT FINANCE SECTION

Kelly Langley, Supervisor Penny Hampton Heidi Rose Bess Wooldridge Susan Lewis

(775) 684-2073 (775) 684-2092 (775) 684-2065 (775) 684-2077 (775) 684-2027

klangley@tax.state.nv.us phampton@tax.state.nv.us hrose@tax.state.nv.us bwooldridge@tax.state.nv.us sulewis@tax.state.nv.us

CONSOLIDATED TAX DISTRIBUTION

Michael Pelham

(775) 684-2024

mpelham@tax.state.nv.us

Tax Cap Explanation

Unusually low general tax cap will lead to flat or lower property tax revenues for some local governments and school districts for 2016-2017

The Department of Taxation has published the preliminary general "Tax Cap" table for use by county officials to forecast the amount of property taxes that must be abated in each county. The Tax Cap provides property owners relief from rising property values by capping the amount of property taxes which can be assessed. The Tax Cap report may be found on the Department's website at:

General Tax Cap

For all property except residential property, State law provides a two-step formula that first takes the greater of: 1) twice the consumer price index ("CPI") percent change in the prior year; or 2) the rolling percentage average change of assessed value over a ten year period for each county. The result is then compared to 8%, and whichever is less becomes the tax cap. The law provides a floor of zero so that if the CPI or average growth is negative, then the general abatement percentage cap cannot fall below zero.

Residential Tax Cap

State law also provides a residential property tax cap of 3%. However, if the general Tax Cap is less than the residential Tax Cap of 3%, then the residential Tax Cap must be reduced to equal the general Tax Cap.

Tax Cap Applicability for 2016-2017

In 2015, the annual average percentage change in the CPI published by the federal Bureau of Labor Statistics was unusually low at .1% (one-tenth of one percent). At the same time, the rolling percentage average change of assessed value for several counties over a ten-year period was lower due to the effects of many years during the recession when assessed values were dropping. Accordingly, the General Tax Cap for nine counties in the State is less than 3% and, therefore, the Residential Tax Cap must be reduced to the same level as the general Tax Cap in those 9 counties. The result is flat or lower property tax revenue available to local government and school districts for the 2016-2017 fiscal year.

The final general "Tax Cap" won't be published until about May 1st. County treasurers use the final Tax Cap table to determine how much property tax will be abated on each property on the property tax bill issued in July.

Nevada Department of Taxation Division of Local Government Services

PRELIMINARY NRS 361.4722 TAX CAP FACTORS

Tax cap may be no higher than:

FISCAL 2016 - 2017

3.00%

8.00%

2 X 0.1%

MOVING AVERAGE

COUNTY

GROWTH RATE CPI CHANGE

CARSON CITY

-0.5%

0.2%

CHURCHILL

1.8%

0.2%

CLARK

-2.7%

0.2%

DOUGLAS

-1.7%

0.2%

ELKO

6.1%

0.2%

ESMERALDA

6.2%

0.2%

EUREKA

5.3%

0.2%

HUMBOLDT

5.8%

0.2%

LANDER

24.2%

0.2%

LINCOLN

6.9%

0.2%

LYON

-0.2%

0.2%

MINERAL

7.4%

0.2%

NYE

-0.3%

0.2%

PERSHING

5.2%

0.2%

STOREY

2.8%

0.2%

WASHOE

-0.1%

0.2%

WHITE PINE

1.9%

0.2%

STATEWIDE

-2.1%

0.2%

RESIDENTIAL

RESIDENTIAL

CAP

GENERAL CAP CAP FACTOR

0.2%

0.2%

1.002

1.8%

1.8%

1.018

0.2%

0.2%

1.002

0.2%

0.2%

1.002

3.0%

6.1%

1.030

3.0%

6.2%

1.030

3.0%

5.3%

1.030

3.0%

5.8%

1.030

3.0%

8.0%

1.030

3.0%

6.9%

1.030

0.2%

0.2%

1.002

3.0%

7.4%

1.030

0.2%

0.2%

1.002

3.0%

5.2%

1.030

2.8%

2.8%

1.028

0.2%

0.2%

1.002

1.9%

1.9%

1.019

0.2%

0.2%

1.002

GENERAL CAP FACTOR 1.002 1.018 1.002 1.002 1.061 1.062 1.053 1.058 1.080 1.069 1.002 1.074 1.002 1.052 1.028 1.002 1.019 1.002

Note (1) : The General Tax Cap is calculated by taking the greater of the moving average growth rate or twice the CPI, up to a maximum of 8%. See NRS 361.4722(1)(b). Note (2): The Residential Tax Cap is 3% unless the General Tax Cap is less than 3%. If the General Tax Cap is less than 3%, then the Residential Tax Cap must equal the General Tax Cap. See NRS 361.4723(2)(b). Note (3): The Consumer Price Index ("CPI") used is All Urban Consumers, Series ID CUUR0000SA0, Not Seasonally Adjusted, U.S. City Average All Items, Annual Average. Source: Bureau of Labor Statistics. This year, the CPI annual average for 2015 is 0.1%. Twice the CPI is 0.2%. Note (4): The Moving Average Growth Rate is based on data from the Statistical Analysis of the Roll from 2007-08 through 2014-15 published by the Department of Taxation; the October 2015 Segregation Report for the 2015-16 Secured and Unsecured Rolls; and the January 2016 Preliminary Projected Segregation Report for 2016-17 Secured and Unsecured Rolls reported by County Assessors.

Preliminary NRS 361.4722 Tax Cap Factors 2016-17 CAP

1

Published March 1, 2016

(1)

Carson City Churchill County Clark County Douglas County Elko County Esmeralda County Eureka County Humboldt County Lander County Lincoln County Lyon County Mineral County Nye County Pershing County Storey County Washoe County White Pine County

STATEWIDE TOTALS

NOTE:

Nevada Department of Taxation 2016-17 (Calendar 2016) Actual Annual Projections

With Payments & Carry Forward Applied

(2)

(3)

(4)

(5)

(6)

16/17 NPM Annual Projection

Payments Total

15/16 Carry Forward Applied to 16-17 Projection Payment

NET NPM TAXES DUE (1) - (2)

STATE DEBT (NET)

DISTRIBUTION OF FY 15/16 NPM PROJECTION PAYMENT

STATE GENERAL FUND

(NET)

$0 572,681 548,428

7,000,271

286,120 17,822,085 15,779,621 24,143,180

3,128 231,697

63,950 5,189,996 2,217,815

58,927 83,342 1,638,594

$0 $ (95,140) (38,428)

(1,992,068)

(5,696,084) (3,629,755) (2,995,647)

(1,200) (7,661) (63,500) (2,773) 131,208

(12,014) (550,000)

-$ 477,541 510,000

5,008,202

286,120 12,126,001 12,149,866 21,147,533

1,928 224,036

450 5,187,224 2,349,023

58,927 71,328 1,088,594

-$ 19,250 17,340

170,469

10,132 413,990 413,121 719,246

88 9,522

15 177,654

79,867 2,479 4,481

37,012

-$ 160,062 252,277

2,492,040

106,158 7,805,230 6,729,248 6,952,153

33 50,565

121 1,372,146

894,132 8,457 -

291,743

$

75,639,834 $

(14,953,061) $

60,686,773 $

2,074,665 $

27,114,365 $

(7)

COUNTY (NET)

298,229 240,384

2,345,693

169,830 3,906,781 5,007,497 13,476,134

1,807 163,950

314 3,637,424 1,375,024

47,990 66,847 759,838

31,497,743

LOCAL GOVERNMENT FINANCE - MARCH 15, 2016

DEPARTMENT OF TAXATION Division of Local Government Services

Local Government Finance Revenue Projections

Fiscal Year 2016-2017 Final

March 15, 2016

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