Fernley, NV – October 18, 2012
On June 6, 2012 The City of Fernley filed a lawsuit against the Nevada Department of Taxation and the Nevada Treasurer alleging that the system by which consolidated tax ("C-Tax") revenues are distributed by the State to Fernley violates the United States and Nevada Constitutions. Fernley noted that C-Tax distributions to Fernley amounted to approximately $7 per resident each year, while comparably sized Nevada cities received anywhere from $450 to $700 per resident each year. C-Tax revenues are typically used by local governments for general operating expenses.
While Fernley's population grew significantly since the C-Tax system was set up in 1997, Fernley's C-Tax distributions remained effectively unchanged since that time, forcing Fernley to provide fewer services to its residents each year. Shortly after the lawsuit was filed, the Nevada Legislature intervened in the case, and thereafter the Legislature and the State each filed exhaustive motions to dismiss the entire case. Fernley asked the Court to deny and continue those motions until Fernley had a chance to prove its case. This week, the District Court granted Fernley's request, denying the motions to dismiss and allowing Fernley the opportunity to proceed with discovery.
Fernley Mayor LeRoy Goodman stated “We are pleased that the Court is giving the City of Fernley the opportunity to litigate the fairness of the CTax distribution system distribution in an impartial setting. The City was disappointed, but not surprised, that even before Fernley had the opportunity to make its case, the State and Legislature filed extensive motions to dismiss the entire case. We remain confident that the fundamental legal flaws in the current inflexible CTax distribution system will be brought to light and we look forward to making our case and working to obtain a tax distribution system that is fair to all Nevadans.”