During the Oct. 27 City Council meeting, the audience was presented with a summarized look at what the current governing administration has in mind for the next five years for Mesquite according to discussions at a July 30 strategic planning retreat attended by council and city staff.
In the summarized six-page briefing from Randy Robison were six specific areas that council and staff believed should be the focus. Among them was financial stability, with a sub section specifying that there needed to be modifications to business license fees for packaged liquor sales. Coincidentally, that item was on the agenda for the evening, as petitioned by Mayor Al Litman. He was seeking input on the effects of a 5 percent increase for those products’ sales. The new fee would affect all sales on prepackaged liquor like typical purchases from stores such as Smith’s and Lee’s Liquor. It would not affect typical bar sales of alcohol directly, however.
Councilman George Rapson, who was absent from the retreat and Councilman Kraig Hafen both agreed that the mere mention of a new tax or fee on businesses right now isn’t what the city needs to do.
“I’m not sure that’s the way I intended it when we had the planning session. I thought we were going to refine it. I didn’t know that we were going to increase it to the extent we are tonight,” said Hafen.
“This is the way we chose to characterize it in that language,” said Robison.
Despite the disagreement on the specified section, the council voted in favor of accepting the presentation by Robison unanimously.
Later in the evening, when the new liquor fee item came up, Litman explained that the increase would be considered a “pass-through” tax that would go directly from the business to the imposing agency, in this case, the City of Mesquite. That currently does not happen with other fees like sales taxes or room taxes.
Rapson was first to comment on the item, stating that the city needs to continue to be fiscally responsible and to keep closing the budget gap. He cited that nearly 70 percent of the city’s budget is spent on salaries and benefits.
“With the contracts that we’ve just entered into, it’s going to be considerably more than that. So every dollar we raise from taxes is going to go to payroll. That just gives the employees more ammunition as to why they should get more raises because there is more money,” said Rapson.
Council continued to battle back and forth on the need or want for an increase of this kind. Ultimately, however, the item on the agenda was just to send out an impact statement to the affected businesses and see what they had to say.
Bryan Wachter with the Retail Association of Nevada commented that no matter which way you look at it, imposing this tax would be a bad idea to follow through on. He had sent a letter to the council in opposition to the fee, stating that “The proposed increase would take the liability to sell these products from $5,000 dollars to $20,000 dollars. These increases don’t seem to be consistent with the population or visitor volume with the City of Mesquite and would make your city one of the most expensive places in Southern Nevada to engage in off-sale liquor sales.”
Councilman Geno Withelder questioned City Finance Director Dave Empey about the impact on businesses if the fee was imposed on them immediately. Because of the reporting structure between businesses and the state Empey said exact numbers are unknown. “The retailers report to the county, which goes to the Department of Taxation. They don’t track sales by city.”
After more discussion, council voted 3-2 (Rapson and Hafen voting against) to continue with the impact study. At this point, they did not impose a new fee but merely voted to explore it further. Businesses should be receiving their surveys soon. Once that information is received the item is expected to be placed back on the agenda for further consideration.