Nevada NewsMakers

Washoe, Elko counties shoulder social costs for prosperous smaller counties, longtime CEO says

News - October 11, 2018

By Ray Hagar
Nevada Newsmakers

Northern Nevada's booming economy is suffering from 'fiscal equity,' where one county reaps tax benefits of economic growth while another carries the burden for housing, education and other quality-of-life concerns, said Tom Gallagher, CEO of Summit Engineering.

Gallagher, whose 40-year business does civil engineering work across Northern Nevada, said recently on Nevada Newsmakers that "fiscal equity" is a major concern in Washoe and Elko counties.

In Washoe, the issue deals with companies like Switch, Telsa and Google, in adjacent Story County, he said. In Elko County, it deals with major mining operations in adjacent Lander and Eureka counties.

"All of the big companies that are coming into Storey County, all of these employees are being housed, schooled and hospital-ed and everything else in Washoe County, Lyon County and some in Churchill County," Gallagher said.

"So we are basically carrying the brunt of the load and not getting any positive fiscal result from that, except for the fact that we get to build lots of new schools and all of the other facilities that are required to house all the people. I mean everybody knows that housing is a negative fiscal drain.

"And it isn't any different here (in Reno-Sparks) than it is in Elko -- where the miners live and where the mines are located," Gallagher said. "The mines are located in Lander and Eureka and those types of places.

"There are some (mines) in Elko (County), sure, but the big ones are located just outside of Elko," he said. "But Elko houses, educates and (provides) everything else for all of the people, So I think that is going to be something that drastically affects both of those areas in Northern Nevada."

A "fair share" formula needs to be established, he said.

"I think fair share with the areas that are most drastically impacted is something that should definitely be looked at," he said.

Gallagher agreed with host Sam Shad that counties such as Washoe also reap benefits because much of the money made at the job sites in Storey County is spent in Washoe. Yet he called for a study to address "fiscal equity.".

"They are benefiting but I think it has to be analyzed," he said. "Are they befitting to the degree they would if it was like one area, one county?"

A solution would be complicated, he noted.

"I know the territorial nature of the people in Nevada very well, but I don't know the solution," Gallagher said. "It takes the smarter guys in Carson City and Washington DC to figure all of that out."

That "territorial nature" of Nevada was apparent in the 2017 Legislature when Assemblyman Skip Daly, D-Sparks, proposed a bill to address the problem. Daly's original AB 153 would have had counties like Storey pay impact fees to other counties.

Opponents said the bill said would lead to numerous lawsuits between counties and stymie economic growth statewide. Opposition to the bill was strong among lobbyists. Daly withdrew the bill, saying at the time that he would again try to find an equitable solution for counties that share impacts from major development projects.

Daly, now running for re-election against the GOP's Jill Dickman, also suggested the Governor's Office of Economic Development get involved in the issue.

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