Carson City keeps property tax rate at $3.57 as CFO flags tightening budget outlook

Sherry Russell Benebus, Carson City chief financial officer, told the Board of Supervisors on Feb. 19 that the city’s assessed value is rising more than previously estimated but that significant budget pressures and uncertain state sales-tax distributions counsel caution.

Russell Benebus said the city’s assessed valuation “is actually going up 2.6% instead of 1.6%,” and presented a multi-year projection showing limited capital capacity for FY 2026 without later budget changes. She warned of large employer-cost increases, including recent Public Employees’ Retirement System (PERS) rate jumps and higher health-insurance and workers’-compensation costs.

The discussion centered on whether to change the property tax rate used to prepare the tentative FY 2025–26 budget. Russell Benebus walked the board through an example showing how the 3% statutory cap on individual taxable-year increases interacts with the city’s rate; she said the city could modestly raise the rate to reduce “abatement” amounts but characterized revenue projections as conservative given limited state sales-tax data.

“We’re only working with four months of data,” Russell Benebus said of the state’s new consolidated tax-distribution system, adding that November distributions included only half of expected consolidated receipts and that the state has said it will clean up missing months by March. She also told the board she had budgeted a 5% increase in property-tax revenue for FY 2026 as a conservative estimate based on recent growth trends.

Board members pressed on fiscal policy and risk. One supervisor noted other jurisdictions are cutting baseline budgets and said Carson City’s 5-year fund-balance policy has helped avoid layoffs. Russell Benebus emphasized the city’s policy target ranges and that available capital is limited: “I can afford 1% of general fund expenditures for the fleet... but after that there’s really no remaining capital.”

After discussion, Supervisor Schutte moved “to direct staff to use $3.57 as the property tax rate in preparing the fiscal year 2026 Carson City budget.” The board voted unanimously to adopt that instruction to staff. The CFO said staff will return with the tentative budget and any updates once the state provides corrected consolidated-tax distributions.

The board also reviewed calendar deadlines tied to NRS 354.596 for final-budget approval after the third Monday in May and set a tentative special meeting date of May 27 to meet statutory timing if needed. Russell Benebus told the board she would return with updated numbers in March and present the tentative budget on May 1 for formal consideration.

The board’s direction does not constitute a final adopted tax rate; it instructs staff on the assumption to use while preparing the tentative FY 2026 budget and related materials.

Russell Benebus’s presentation and the board’s direction frame the tentative budget process amid uncertain state sales-tax accounting and ongoing cost pressures from PERS and insurance.

The board approved the instruction unanimously and will consider the tentative budget at a May meeting where staff will present updated revenue numbers and any supplemental or capital requests.