Business wins a property-tax break in Senate committee

Nevada businesses finally found some traction against rising property taxes in the Senate Taxation Committee on Wednesday.

From major utility companies and gamblers on the Las Vegas Strip to small business across the state, owners had been concerned about plans that capped single-family, owner-occupied homes at a 3 percent property-tax increase but allowed their increase to float up to the average increase over the past decade.

They pointed out the growth in assessed valuation in Clark County is 28 percent this past year.

Sen. Warren Hardy, R-Las Vegas, said the Assembly plan cut that to 8.8 percent but he urged members of the committee to replace that formula with a "straight 8 percent cap" for all property owners who don't qualify for the 3 percent homeowner's cap.

He told the committee the Assembly proposal uses the "extreme hardship" provision in the Nevada Constitution to create a split roll that taxes business differently than homes and that he was concerned that would become permanent, allowing future Legislatures to avoid making permanent changes to fix the property tax system.

"I'm less concerned what the cap is than that we have a cap that compels us to come back and address this constitutionally," he said.

He also said a hard cap is easier to explain and support when constituents ask about the property tax fix.

Carole Vilardo of the Nevada Taxpayer's Association said capping business property tax increases is more fair to them as well. But several lobbyists and more than one member of the committee agreed the biggest beneficiaries of the change will be Sierra Pacific and Nevada Power cos. and the largest casino corporations on the Las Vegas Strip.

She, like several other business representatives, argued whatever homeowners get, business should also receive.

Sen. Sandra Tiffany, R-Henderson, asked why not cap all increases at 3 percent but Hardy said he agreed that would have a significant effect on local government and school budgets. Tiffany mentioned at one point in the discussion that would cost the state $110 million to make up the loss to public school budgets but said the state has it in surplus.

The rest of the committee agreed with Hardy and supported the 8 percent cap.

Clark County and Las Vegas officials Mike Alastuey and Marvin Leavitt told the committee they can live with 8 percent if lawmakers make changes that fix the system two years from now. Leavitt pointed out that most counties, including Carson City, Douglas and Washoe, increased less than 8 percent and won't be affected by the change. The big change is in Clark County where overall assessed valuation increased more than 28 percent this past year.

Alastuey made it clear 8 percent is not capping Clark County's property-tax growth at normal levels. He said annual increases have averaged over 11 percent for a decade.

"This is below normal, let's be clear on that," he said.

The proposal will go to the Senate floor for a vote today.

If the Assembly agrees with the change, the state will have to increase public school funding a total of $44 million over the next two years to make up the difference in property-tax revenue school districts will receive because of the change. But the changes will be relatively small for local governments in most cases.

If the Assembly refuses to go along, the two sides must find a compromise quickly, because county assessors say they need to know the new rules within a week in order to recalculate taxes on several million parcels of land in time for this year's property tax bills - which must be mailed in two months.

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