Experts urged lawmakers on Thursday to avoid property tax solutions such as a California-style Proposition 13 to help Nevadans with spiraling tax bills, and instead work carefully - but quickly - on solutions such as a cap or property value exemption.
Guy Hobbs told a joint Senate-Assembly panel hoping to head off possible voter initiatives that a Proposition 13-type solution, that rolled back property values and limited tax growth to 2 percent a year, is "out of the question" if the goal is to provide immediate relief for homeowners.
And in the long run, a constitutional amendment that would be required for such a plan might have some unwanted consequences, Hobbs said, adding that the long-term impacts of Proposition 13 "haven't always been positive for California."
Hobbs recommended pursuing several possible solutions he outlined in a report to lawmakers. Three involve capping growth on the taxable value of land, at 6 percent or some other percentage. Others would exclude part of a property's value from taxation, grant exemptions, or provide relief based on economic hardships.
Besides the concern about a California-style tax rollback, Hobbs also raised questions about another possible solution that would reduce Nevada's property tax rates. He said that while the plan is attractive because it is the simplest mathematically, it has the potential to distribute the tax burden unevenly.
Careful work on whatever proposal emerges from the 2005 Legislature is vital because property tax "is a source of revenue that everyone has a stake in," he said. "It's one of the most reliable services that governments have year after year."
"It's that level of expected growth each year that budgets are predicated on."
Tax expert Marvin Leavitt also cautioned against "unintended consequences," telling the legislators they have "a huge job" in ensuring that the final legislation is as fair and equitable as possible.
Leavitt said the tax cap concept - preventing property taxes from increasing from year to year by more than a certain percentage - has advantages because that would guarantee relief for all homeowners.
But Leavitt also said such a cap would tend to benefit owners of expensive homes more than the owners of lower-priced properties - even though they'd also get a break.
Carole Vilardo of the Nevada Taxpayers Association, who has supported the idea of an economic hardship exemption, said that given the time constraints - the need for a tax bill by March - a perfect solution will be hard to find.
"I don't know of any tax and anything you do ... that may not be constitutionally challenged," she said. "You just want to be sure as you can that what you've done is defensible and will withstand challenge."
"Are we going to have unintended consequences. You better believe it."
