Restaurants and other businesses in southern Nevada could get a reprieve of up to a year before steep healthcare cost hikes take effect, but only if pandemic relief dollars can fill the void.
The Southern Nevada Health District Board of Health on Thursday approved — but will delay implementation — 27% general fee hikes for environmental health inspections and permits. This buys time to pursue US federal bailout funding to cover the first year of the increase.
Bailout dollars can be used by states and governments to respond to the health and economic impacts of the pandemic and to prevent cuts to public services.
The Legislature’s interim finance committee in the coming months is expected to approve the allocation of about $5.5 million, board members Scott Black and Marilyn Kirkpatrick said.
The state has worked with the district on a plan to fund any COVID-related expenses it incurs, said Meghin Delaney, a spokeswoman for the governor’s office. She said the proposal had not been finalized.
Although funding remains uncertain, opponents of the hikes have seen this step as positive.
“I think they listened to our concerns, and I think we appreciate the steps they took today, the recognition that we’re still recovering,” said Virginia Valentine, president of the Nevada Resort Association, which expressed concern about the impact on resort restaurants.
District staff had recommended that the fee increases take effect in July. But if the funding arrives, companies won’t have to pay the 27% fee increases until the next fiscal year, in July 2023.
But if the Interim Finance Committee doesn’t approve the spending, companies will have to pay the increase in January, mid-year. Representatives from the Nevada Restaurant Association said the increase could be $1,000 or more for a restaurant, depending on the number of permits required.
Still reeling from pandemic downturns and facing rising food and labor costs, restaurants have complained that the fee increases are extremely untimely.
More than 30% of restaurants in Nevada have closed permanently during the pandemic, with some not reopening after temporary closings related to COVID-19, said Alexandria Dazlich, director of government affairs for the Nevada Restaurant Association, after the meeting.
But district staff said the increases were long overdue, noting the fee had not been increased since 2009.
The fee supports services that minimize the risk of foodborne illness, prevent hazardous waste from entering the environment, and generally promote health and safety. The fee increases will fund 24 new positions in food operations, solid waste management and consumer health, said Chris Saxton, director of environmental health.
The higher fees apply to permits and inspections for a range of businesses beyond food establishments, including hotels and motels, child care centers, commercial pools and spas, residential septic systems, recycling centers, tattoo parlors and schools with kitchens.
The health board also voted to approve indefinite annual fee increases of between 1% and 3% based on the consumer price index. Business advocates, including resort and restaurant associations and the Vegas Chamber, have expressed opposition to automatic increases because they lack transparency and accountability.
In response, the health board voted to review CPI increases every two years after the first annual adjustment, which will take place in July 2024.
The district’s Environmental Health Division projects that without the increases, it would see $23.04 million in expenses for the next fiscal year, but only $20.24 million in revenue, for a shortfall of $2.8 million. of dollars. With the increased fees, he forecast $25.75 million in expenses and $25.70 million in revenue, for a loss of $45,000.