Red light districts sweeten county coffers

by Lois Gormley, Outpost staff

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Prostitution may be the oldest profession, but the ability of Nevada counties to profit from it is still fairly new. 

Prostitution began being legalized in some Nevada counties in the early 1970s. While Nevada state law prohibits prostitution in counties with populations in excess of 400,000, that only excludes Clark and Washoe counties, leaving the decision up to the remaining 15 counties. Today, the 32 to 35 brothels operating legally in the state reside within 10 of those 15 counties. 

Though some would like to believe that legalization began as an answer to an ever present threat to public safety, the counties, like the state department of taxation, were well aware from the inception of the legal prostitution industry, of the possibilities it could provide as an additional economic resource.

But while the state is left with mere crumbs, the counties, depending on the size, number and earnings of their particular brothels can consider legalized prostitution as a serious revenue builder for their coffers.

Still, the benefits tend to vary widely from county to county. The estimated $10 million total collected from brothel-related revenue sources annually, such as licensing fees, property tax and work card fees, is far from evenly distributed. Some counties are raking in the lion's share, while others say they are barely covering the added costs of police supervision and regulatory enforcement.

One such example of two counties situated at extreme ends of the financial spectrum are Lyon County, located in the northeastern portion of the state, east of Carson City, and it's nearby neighbor Churchill County, where the town of Fallon is located, east of Reno.

Lyon County is good example of a county reaping substantial benefits from the prostitution industry. Home to four brothels: Kitty's Guest Ranch, the Moonlight Bunnyranch, Sagebrush Ranch and Kit Kat Ranch, the brothel licensing fees alone are estimated to exceed more than $200,000 for the 1998-99 fiscal year, according to figures supplied by the Lyon County Comptroller's office. Although in light of the county's $26 million annual budget, the fees collected from the business of prostitution in no way represent the majority contribution to county coffers.

moonlight bunnyranch

This legal brothel in Lyon County does its part to contribute to the county economy. Courtesy of the Moonlight Bunnyranch

Even so it is certainly not to be dismissed as negligible. Lyon County Comptroller, Rita Evasovic, said the money from the brothel licensing fees goes into a fund where it is used to buy vehicles for the county. 

"It's a privilege to operate fee," Evasovic said of the brothel licensing fee. "The size of the fee depends on the size of the brothel." 

The larger the brothel, the higher the volume of business, the larger the fee. 

But while the financial benefits collected from the red light district in Evasovic's domain are substantial, other counties, like Churchill County, are situated at the other extreme of the financial spectrum.

Alan Kalt, Churchill County Comptroller, said prostitution is not a big revenue generator for his county. In fact, Kalt said he believes that it costs the county more in public safety issues that it generates financially. 

"We tolerate it because the voters have spoken," said Kalt. "The biggest argument for it is 'regulate it and you can control it.' But it costs the county more than it makes from it." 

Instead of the more than $245,000 that Lyon County estimates it will collect in total fees this fiscal year, Churchill County, which has fewer operating brothels, estimates totals at more than $17,000. 

The amount of property tax paid tends to vary sharply depending on the county as well, ranging as low as $766.72 for the Lazy B in Churchill County to as high as $5,464.74 for the Sagebrush Ranch in Lyon County.

Kalt, the Churchill County comptroller, said the property taxes tend to be fairly low for the brothels in his county because they are assessed by the actual value of the structures and the property, not what the business could sell for, which would be a much more substantial amount. 

Kalt said the sharp contrast in revenues could additionally be explained by customer volume. He said he would speculate that the volume of business received at brothels in counties like Lyon is much greater than that experienced in the Churchill County brothels. 

Logically, more brothels offer more opportunity for business. In comparison to the four brothels operating in Lyon County, Churchill County, limited by county ordinance, has only two. Of those two, one, the Lazy B, has been shut down for long periods of time over what owner Rich Triplett called a lack of reliable management, according to a series of articles by Marlene Garcia in the Lahontan Valley News on the prostitution industry in Churchill County 

But even though it wasn't in operation, the Lazy B, which re-opened its doors over the recent Thanksgiving holiday, continued to pay all the county fees necessary to keep its license current, according to Churchill County records.

County statutes have outlined a strict protocol for the licensing and licensing renewal of brothels. Each time a brothel is sold in Churchill County statutes require the new owner to apply for a new license since the licenses are non-transferable and the county requires extensive investigation prior to granting one. Additionally, if a brothel owner allows his or her license to expire he or she must reapply and go through the entire investigation process again. 

It is a process that is not only lengthy but quite costly as well. The county requires a $3,000 investigation fee up front, and if the total cost of the investigation exceeds that the license applicant is held responsible for any excess costs.

Brothel and liquor licensing fees aside, counties also collect fees for work permits, business licenses and property taxes. 

Some counties, like Lyon, charge brothels an additional fee for a regular business license as well as the brothel license. In that county the fees are fairly minimal, ranging from $125 to $225 per year. Other counties, like Churchill, issue the brothel license in lieu of a regular business license.

Work permit or work card fees are charged by the county sheriff's department for documentation of all brothel employees--managers, bartenders, maids and maintenance workers--not just the prostitutes in accordance with county statutes.  

Prostitution work card applications in Churchill County must be filed with a $100 non-refundable application fee or a $100 annual renewal or revision fee, twice the amount paid by prostitutes in Lyon County. In Churchill County the work cards are site specific too, so they must be renewed each time the prostitute changes brothels within the county as well as when she moves to a brothel in a different county. 

Because Nevada law has left the legalization issue up to each individual county, with the obvious exception of Clark and Washoe counties, it had also been left up to each individual county to decide the regulations and fees it wishes to impose on the industry. 

Keeping in mind the ability of the businesses to pay, it would appear that both counties compared here have crafted statutes that have allowed the counties to collect some additional revenue without making it impossible for the businesses to operate at a profitable level.




Posted Dec. 11, 1998
Copyright 1998 Nevada Oupost