Assembly Majority Leader Barbara Buckley, D-Las Vegas, Thursday presented a property tax plan she described as a constitutional and permanent solution to the problem of skyrocketing tax bills in Clark and Washoe counties and other parts of Nevada.
Property owners have complained about increases of 30 percent and more in Southern Nevada and increases of up to 80 percent in assessed valuation at Lake Tahoe in the past year.
The plan, Buckley said, consists of three steps - the first being a 4 percent limit on property tax increases for all owner-occupied homes with a taxable value of $500,000 or less.
For business property and homes worth more than that, assessors would reduce taxable values by limiting their increase in assessed value to the average increase in that county over a period of up to 10 years. That, she said, would remove any "spikes" in value like those which have occurred in growth areas of the state in the past two years.
Third, she called for a constitutional amendment to give lawmakers more freedom to value properties at different rates so they could give residential property a break.
Legislative Counsel Brenda Erdoes said the two different ways of taxing property would be legal despite Nevada's constitutional mandate that taxes be "uniform and equal" for all Nevada property. She said the reason is the constitutional provision which allows a property tax break on owner-occupied, single-family residences for "extreme hardship." Erdoes said the proposal would define any increase of more than 4 percent on those homes as suffering an extreme hardship.
Assembly Minority Leader Lynn Hettrick, R-Gardnerville, questioned the constitutionality saying "I don't see how you can arbitrarily pick a value and say anybody below this gets relief and anybody above doesn't."
"Just because a house is valued at more doesn't necessarily mean the person has more ability to pay the tax," he said.
He also pointed out the plan would do nothing to protect renters from exorbitant increases when landlords pass on the much higher increases in taxes they must pay.
"Every approach has a downside," Buckley said.
She said that is why she wants a constitutional amendment so lawmakers can fix such problems.
A constitutional amendment, however, would take at least four years.
Speaker Richard Perkins, D-Henderson, said he thinks the plan has support not only from Assembly Democrats but Republicans and members of the Senate as well.
Hettrick said afterward he's not completely opposed to the idea but wants to see numbers that show him the actual effect of the proposal before voting. He said he still favors capping the increase in all property tax bills to 6 percent a year.
"Why should just home owners with houses worth less than $500,000 get relief? Why shouldn't every property owner get relief?"
Senators and Assemblymen were told a straight tax bill cap could also use the extreme hardship section of the constitution. University of Nevada, Las Vegas law school professor Steve Johnson said legislators could declare any increase in property values of more than 6 percent a year to constitute an extreme hardship and limit increases in tax bills to that amount.
He said that should stand any court test in Nevada.
Perkins said the Senate Taxation and Assembly Growth and Infrastructure committees will meet again Tuesday to look at numbers comparing the different proposals before them. They are a tax freeze, the cap on annual tax increases, a complex formula using factors to reduce tax rates in the different counties and Buckley's proposal.
Lawmakers have only until the end of this month to pass something in time for assessors to implement the changes on this year's tax bills.
n Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.
