Las Vegas asks to raise taxes, fees to take on homelessness crisis

At an October Las Vegas City Council meeting, city officials agreed more needs to be done to address homelessness in Southern Nevada, and there isn’t enough money to do it.

So the council is asking the state Legislature for permission to raise an estimated $20 million in new taxes and fees.

The council voted to request legislation that would allow the city to increase the real property transfer tax and a sewer service charge. The revenue would be used to fund transitional housing, affordable housing and the Courtyard Homeless Resource Center.

Permission to increase taxes would have to be approved by a two-thirds majority in both houses of the Legislature, and signed by the governor.

If passed in the 2019 Legislative Session, the city would be able to do two things. 

First, it could increase the sewer surcharge, which is currently about an estimated $255 per household with a pool each year, by about 8.6 percent — about $22 — and generate an estimated $5 million. “This would bring a source of money directly to the City of Las Vegas,” said Ted Olivas, the director of administrative services for the City of Las Vegas.

Second, local government would be permitted to increase the real property transfer tax in Clark County, which is currently $2.55 per $500 of property value, by 25 cents. “If the average sales price for real property is $220,000, it would bring in $111,” Olivas added.

However, the real property transfer tax is regional and not just specific to the City of Las Vegas. It would generate an estimated $15 million in total, but the city was unable to provide an estimate of the portion it would directly receive. “The city would advocate that the funds be distributed via the already existing consolidated tax (C-Tax) formula as it is already defined by state statute,” said Jace Radke, a spokesperson with the City of Las Vegas.

There isn’t a contingency plan if the bill doesn’t pass. “At this time, the city is focused on this,” Radke said.

More than 6,500 people are experiencing homelessness in Southern Nevada on any given night. More than 75 percent of them “were living in Southern Nevada before they lost their housing,” according to a presentation provided to the council. “They did not come here as a homeless person seeking services.”

The homelessness crisis spans the entirety of Southern Nevada. “This is a local challenge and local problem for our constituents,” Kathi Thomas Gibson, the city’s director of community service, told the council at its October meeting.

For the current 2018-19 fiscal year, the City of Las Vegas has allocated nearly $20 million to fund homeless services, less than 2 percent of the city’s budget.

“(Our regional system) is underfunded, and there are not any new dollars coming in to address the growing problem,” Thomas Gibson said.

“People get nervous when a tax is mentioned,” said Las Vegas City Councilman Bob Coffin. However, the city “would be spinning some sort of a cosmic tale if we said it wouldn’t involve money” to confront homelessness, Coffin said.

Cities nationwide, including Chicago, Los Angeles, San Francisco and Seattle, have raised taxes to address the nation’s housing and homelessness crises.

San Francisco recently passed a proposal that raised taxes on gross annual receipts for the top 1 percent of large corporations in the city. It is estimated to raise about $300 million, and half the money would go toward the construction of affordable homes.

Miami created a Homeless Trust, which was financed by the Florida Legislature’s approval of a 1 percent tax on restaurant food and beverage items to go toward homeless and domestic violence services — 85 percent goes toward homeless services and 15 percent funds domestic violence centers.  

The Las Vegas council decided on the sewer surcharge and an increase to the real property transfer tax because the fee structures for those revenue sources already exist, Radke said.

The proposal to submit a bill draft request passed the city council 4-2.

Mayor Carolyn Goodman was joined by councilmembers Lois Tarkanian, Cedric Crear and Coffin in supporting the request.

Councilmen Stavros Anthony and Steven Seroka were opposed. Councilwoman Michele Fiore was absent from the meeting.

“When people write a check to the City of Las Vegas for sewer services, they do that with the understanding they are giving us money for sewer services, fixing the infrastructure, increasing the number of sewers we need,” Anthony said at the October meeting. “I don’t want to say it’s sneaky, but putting a homeless charge on the sewer charge isn’t right.” He had similar thoughts for increasing the real property transfer tax.

Clark County spokesperson Dan Kulin said he was unaware if county officials had begun to consider the city proposal, or whether it would receive the county’s support.

Nevada has a long history of failing to fund homelessness services and transitional housing.

Historically not a public priority

In 2002, Question 11 asked Clark County residents if the County Commission should urge the 2003 Nevada Legislature to impose an annual property tax of .01 cents per $100 of assessed property value.

The revenue, an estimated $4 million annually, would have gone to a Homeless Service and Affordable Housing Trust Fund, to mostly pay for rental assistance and construction of transitional and permanent housing. The request never made it to the Legislature — it got crushed at the polls, with 64 percent of voters opposed.

The 2007 Legislature also discussed allocating money toward homeless services, specifically for transitional housing. Assembly Bill 126 asked for $20 million. It never made it out of committee. In 2008, the Interim Finance Committee did go on to allocate $1 million for transitional housing and homeless services.

During the October meeting, Seroka suggested there should be private sector buy-in to help address homelessness. “I know we’ve done a lot of research around the country and one of the solutions has been a significant private investment,” he said. “While we are taking this burden on our shoulders, we are showing private investors we are taking the lead on this. But we need private investment to make it work.”

The Mayor’s Fund for Las Vegas LIFE, which was created in the fourth quarter of 2017, is one avenue that allows corporations, businesses and nonprofits to donate to various city projects. Since launching, the fund has received $468,000 — $125,000 has gone toward the courtyard.

Additionally, the non-profit Built for Zero Housing Campaign Fund has raised $14 million to provide permanent housing for the chronically homeless, which increased 17 percent in the last year. Efforts are led by HELP of Southern Nevada, Lutheran Social Services of Nevada and U.S. VETS.

There are an estimated 661 people who are chronically homeless, which means they have a disabling condition, have experienced homelessness for at least one year or have had more than four episodes of homelessness in three years.

“This is our most vulnerable population,” says Shalimar Cabrera, the executive director of U.S. VETS in Las Vegas. “They have been on the streets the longest, have the highest potential of dying on our streets and are the hardest population to serve.”

Cabrera adds it costs about $21,000 to put a person in permanent housing with case management and supportive services, compared to an estimated $73,000 a year it costs — hospitalization, incarceration, policing, other services and costs — to have a person unsheltered.

In the last year, Built for Zero has only received one corporate donation — $213,000 from the Las Vegas Sands Corp.