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Free Lake Tahoe — from unnecessary agencies

David Colborne
David Colborne

As a general rule, county commissioners only spar verbally. And on paper, at least, the Douglas County Commission is an unlikely source of political strife. The last time a Republican lost an election for a County Commission seat was 1986, and the last time a Democrat won one Nazi soldiers were starving in Stalingrad.

Even more impressively, by the time that Democrat’s term completed in 1946, every single member of the County Commission had already been born. With a median household income over $60,000, the residents of Douglas County are more prosperous than those in nearly every other county in Nevada. Between South Lake Tahoe, Kingsbury Grade, Genoa, the Carson River Valley and Topaz Lake, Douglas County also arguably has the most picturesque scenery this state has to offer.

Given all that, what issue could possibly inflame the passions of a pair of Republican, septuagenarian Douglas County commissioners so as to spark a hospital visit-inducing altercation that occurred in a back room during a meeting recess — after five hours — two Thursdays ago?

The answer, as it so often is in Nevada, is gaming.

How much does it support us, and how much must we be willing to give to support it back?

Outside of Clark County, gaming has been declining throughout Nevada for decades, and South Lake Tahoe has been no exception. Starting in 1995, gaming receipts in South Lake Tahoe began a three-year slide from more than $330 million to less than $300 million. Spurred by this decline, the Legislature in 1997 created the Tahoe-Douglas Visitor’s Authority (TDVA), which, funded by an occupancy tax on hotel and other lodgings in South Lake Tahoe, was tasked with publicizing and promoting the casinos in the area, as well as building a convention center.

The TDVA failed on both counts.

Over the first decade of its efforts, gaming revenue in the region recovered to nearly $327 millionnot adjusted for inflation — before declining by more than 25 percent in 2009. Gaming in South Lake Tahoe has never recovered from the recession. In 2018, gaming win was only $231 million; adjusting for inflation, that is less than $150 million (in 1997 dollars), meaning, in real dollars, gaming in South Lake Tahoe is earning less than half of the revenue it earned in 1995.

Oh, and there’s also no convention center.

Sometimes, though, failure is a good thing. In order to fund a new convention center, the TDVA would have had to issue bonds backed by the occupancy taxes that fund the TDVA to pay for construction. However, the past two decades has produced a long-documented glut in convention center construction. Hotel occupancies have, in many cases, only increased by half of original forecasts. That’s a problem, as the taxes on those increased hotel stays are what are supposed to repay the bonds.

When occupancies don’t increase as forecast, municipalities with expensive bond-funded public projects, like Reno, face a tough choice. Do they default on the bond, as the tax stream dedicated to repay the bond is insufficient? Or do they repay the bond out of the general fund? If they let the bond default, the municipality’s credit rating is destroyed, hampering its ability to ever borrow again. On the other hand, money that comes out of the general fund to repay bonds is money that can’t go to whatever the general fund normally pays for — police, fire and road maintenance services, among other things.

Instead of letting an ill-advised public project quietly die, the Douglas County Commission and the state of Nevada have been working together to keep this zombie project shuffling along. In 2015, Douglas County even created a redevelopment agency (RDA) for its portion of the Lake Tahoe basin, which it said would use part of its proceeds to help finance a new event center (the differences between a convention center and an event center is more semantic than substantial). Meanwhile, to improve the TDVA’s financial position, the Legislature is considering SB461, which, if passed, would add a $5 per night tax to all rental lodgings in the area.

There are multiple problems with this approach.

First, RDAs are meant to improve blighted areas, and there is literally no place on Earth less blighted than Lake Tahoe. Lake Tahoe’s biggest problem is that there are too many people desperate to build something within eyesight of it. Creating a redevelopment agency which then funnels increases in tax revenue to the agency instead of to local and county governments effectively subsidizes development in a part of the world where developers need absolutely zero encouragement from anyone to build there.

Secondly, though SB461 describes the $5 per night tax as a “tourism surcharge,” the statute it amends makes no distinction between hotel rooms and rented residences, and an alarmingly ambiguous “may” exempts room taxes on long-term rentals. Thus, if passed, the measure could effectively raise the rent on anyone renting in the area by more than $150 per month, even those living in weekly motels. Because of Lake Tahoe’s alpine climate, commuting is challenging for half of the year. Consequently, many of Lake Tahoe’s service workers live near the lake. And because service workers living near Lake Tahoe aren’t paid any better than service workers anywhere else, a $150 per month rent hike would be extremely onerous on the poorest of Lake Tahoe’s workers.

Fortunately, the people of Douglas County, and a couple of their county commissioners, intuitively understand the flaws with this project. Less fortunately, as the video of the meeting made clear, county government in Douglas County makes Pawnee’s satirical government in Parks and Recreation look downright competent, functional and sane by comparison.

On the pro-side of the project, you have a county commissioner saying, “RDAs are so good, the governor [of California] raped them.” On the anti-side of the project, one of the county commissioners opposed to the project, John Engels, wears — for reasons that make sense to someone, I’m sure — a U.S. Cavalry captain’s hat. In the public comment portion of the meeting, one person pointed out that since George Soros is a major shareholder of Caesars Entertainment, the proposed event center should be called the “George Soros Event Center.” A casino employee observed that the two county commissioners opposed to the event center are supporters of the Douglas County Good Governance Group, which concerns itself, among other things, with the growing threat of “socialism/communism” in a county that has been under Republican Party rule for more than 70 years.

Frankly, by the end of the video of the five and a half hour meeting, I was exasperated enough to consider violence myself.

Instead, however, I will merely recommend a Toastmasters membership, a copy of Robert’s Rules and a strict timer for every county commissioner. Additionally, I recommend that our state government not encourage the Douglas County Commission to subsidize a failing industry in the midst of the most desirable real estate in the state. Oppose SB461, dissolve Douglas County Redevelopment Agency Number 2, close the Tahoe-Douglas Visitor’s Authority and let Lake Tahoe prosper on its own merits.

David Colborne has been active in the Libertarian Party for two decades. During that time, he has blogged intermittently on his personal blog, as well as the Libertarian Party of Nevada blog, and ran for office twice as a Libertarian candidate. He serves on the Executive Committee for both his state and county Libertarian Party chapters. He is the father of two sons and an IT professional. You can follow him on Twitter @DavidColborne or email him at [email protected].


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