Lawmakers near deal on property tax plan

After a day of number-crunching and negotiation, Nevada lawmakers were close to consensus Thursday on a plan to provide relief to Nevadans facing soaring property tax bills.

"The bill is pretty well solidified," Senate Taxation Committee Chairman Mike McGinness, R-Fallon, said. "I think our members want to be assured by the numbers."

The compromise is a combination of a three-pronged plan conceived by Assembly Majority Leader Barbara Buckley, D-Las Vegas and a simpler, flat-cap proposal backed by Assembly Minority Leader Lynn Hettrick, R-Gardnerville.

Using a clause in the Nevada Constitution that allows tax exemptions for homeowners experiencing "severe economic hardship," the bill would cap property tax increases at 3 percent for all single-family, owner-occupied residences.

The rest of the properties - largely commercial property and residences - would receive a reduction based on a 10-year average of the tax increases on such property.

The plan also may include an amendment to the Nevada Constitution altering the clause that requires taxation to be "uniform and equal." In their attempts to target relief at homeowners and balance economic differences in rural and urban counties, lawmakers have repeatedly run up against the clause.

Buckley's original plan provided an across-the-board rate reduction on all Nevada properties based on a complicated formula. Also, single-family, owner-occupied homes valued at $500,000 or less would have tax increases limited to no more than 4 percent a year, based on the idea that higher increases would represent an economic hardship for them.

It also included a "spike buster" that gave relief to people whose home values exceeded the $500,000 cut-off and whose taxes were set to grow at twice the rate of inflation. After the first reduction, their tax increases would be capped at 5.8 percent.

By the end of the day, lawmakers said the $500,000 threshold had been replaced by a broader approach to accommodate Republican lawmakers who had attacked the cut-off as arbitrary and unfair.

"I think we've been convinced you could have an economic hardship regardless of the value of your home," said Assembly Speaker Richard Perkins, D-Henderson.

Also, the statewide simulated rate reduction was judged to be too complicated and was replaced by a reduction based on an average rate of growth over 10 years.

The simulated tax reduction has fallen out after about, I think, the 29th spreadsheet," said Perkins.

Hettrick had been pushing for a 3 percent cap on increases for all properties, arguing that it was the fairest way and would be easy to explain to citizens.

The consensus plan was put before caucuses of both parties, although leaders tried to remain tightlipped on details, saying they needed time to review final data before the plan could be openly debated.

Senate Republicans raised concerns that a 10-year average could harm rural counties.

"There are rural counties where the property values have gone down, it's possible the 10-year average would result in a negative number," said Sen. Bob Beers, R-Las Vegas.

Beers said Republicans wanted to take the weekend to review the plan.

Some say there's not much time for debate. County assessors told lawmakers a bill must pass both houses and be signed by the governor by March 31 for it to affect next year's bills.

But Beers said he thinks the deadline could be flexible.

"There's no giant hurry. March 31 is somewhat arbitrary," he said.