Consensus property tax plan unveiled

No homeowner would see his property tax rise more than 3 percent a year under a consensus property tax plan unveiled Friday by Nevada lawmakers.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, said the proposal supported by both the Senate Taxation and Assembly Growth and Infrastructure committees would define any increase higher than that as an "extreme hardship" - the language used in the state constitution to permit taxing owner-occupied, single-family homes differently than business and other property.

For businesses and all other property, she told a joint session of the committees, the tax increase would be capped at either two times the year's inflation rate or the average annual increase in assessed valuation over the past decade.

"That is basically a spike buster," she said.

According to the table of governmental entities staff provided to show how the plan works, the plan takes actual growth in value across the state and typically cuts the increase to about a quarter of what it would be if nothing in the law is changed.

Carson City, for example, has an assessed valuation growth rate of 4.7 percent in the past year. That would be cut to just six-tenths of 1 percent overall. Genoa, with a 21.5 percent growth rate, would be held to 4.4 percent increase in property tax revenue overall.

In a rare moment of nonpartisan unity, Buckley - one of the Legislature's most liberal members - was joined in presenting the plan by Assembly Minority Leader Lynn Hettrick R-Gardnerville, one of its most conservative.

"There's no perfect solution here," he said. "This does as much as we can do."

Hettrick said the challenge was to give every group as much relief as possible without leaving state and local governments unable to pay for vital services.

The state will have to make up $25 million in the public education budgets because of the property tax reductions, said Assemblyman Morse Arberry, D-Las Vegas.

Senate Majority Leader Bill Raggio, R-Reno, agreed: "This is the best compromise we can have at this time. It provides substantial relief but doesn't have catastrophic effect on local governments and the state."

The only objections by any member of the two committees came from Sen. Sandra Tiffany, R-Henderson, who said business should get the same break as homeowners.

"Once again, it's on the backs of business," she said.

Hettrick said the package was a "balancing act" but pointed out that many businesses facing increases of more than 30 percent if nothing is done will get less than a 10 percent increase under the plan.

Buckley said business owners also have the ability to seek further relief from the Tax Commission, which can lower their assessed valuation based on decreases in profit from year to year.

"The homeowner doesn't have that, so what we are doing is leveling the playing field," she said.

Hettrick said the plan is also designed to minimize the effect on small counties with zero or negative assessed value growth. He said those counties can grow assessed valuation at double the Consumer Price Index - the inflation rate. That would be 5.4 percent this year.

He said the other big advantage of the plan is that it helps make growth pay for itself because all new development would be put on the tax roll at market value.

Carson City Assessor Dave Dawley said he would have to take a careful look before judging the plan but that it seems better than most other plans lawmakers have discussed over the past month.

Andrew List, representing the Nevada Association of Counties, made a similar comment.

"We have to look at whether the counties can absorb the cost, but this is better than the other plans we've seen," he said.

A key change in the final plan is that all owner-occupied, single-family homes get the benefit of the cap. Buckley's original plan provided capped increases for homes worth less than $500,000 but left those above that line in the same category as business properties - which meant many homes in the Lake Tahoe Basin, for example, would still face tax hikes of 30 percent and more.

Mary Lau, representing Nevada retail businesses, and Ray Bacon, lobbyist for industrial firms, said they still have to analyze the effect of the proposal.

"It's still a break," said Lau, agreeing that existing law would hit her clients much harder.

- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.