Cathleen Allison/Nevada Appeal Sens. Warren Hardy, R-Las Vegas, and Maggie Carlton, D-Las Vegas, listen to discussion on the Senate floor Thursday at the Legislature. Carlton cast the sole vote against Hardy's amendment to cap property tax growth at 8 percent for state businesses.
Lawmakers will today pass out property tax relief that caps increases on homes at 3 percent a year and all other properties, including businesses, at 8 percent.
That is basically the plan approved Tuesday by the Senate to prevent increases which, under existing law, could exceed 50 percent in some areas, such as the Tahoe Basin.
Assembly members Thursday tried to push the 8 percent cap up to 10 percent, saying that would better protect schools and local governments. But Sen. Randolph Townsend, R-Reno, pointed out that a measure to actually freeze taxes at zero percent this year failed by just one vote in the Senate. He said a higher cap than 8 percent wouldn't fly in that house.
Faced with a deadline from county assessors who say any plan to change this year's property tax bills must be in their hands today, the Assembly agreed to the 8 percent cap.
Assembly Majority Leader Barbara Buckley, D-Las Vegas, said all members of the Legislature agree something must be passed - and now.
In last-minute negotiations, the Assembly convinced senators to add provisions designed to give small business owners and renters a break.
Renters were the biggest concern for many, because landlords served notice they would have little choice but to pass on whatever tax increases they received to tenants.
Buckley said the idea is to give landlords whose rentals are at or under the federal maximum prices for low-income rentals the 3 percent cap, instead of 8 percent, if all their units are at or below those amounts.
She said landlords could weigh the benefits of the lower taxes against more money from higher rents, and many would probably decide to take the tax break, sparing their tenants larger increases.
Assembly Minority Leader Lynn Hettrick R-Gardnerville, also backed the idea.
"This is more holding rents down for low-cost housing," he said. "I think it would have the intended effect."
The small-business break is an addition to AB489, and directs the Tax Commission to provide businesspeople with "a simple, easily understood form" to request county assessors allow them the same tax breaks under the income approach to valuing their businesses such as mines and other big businesses now use to get their taxes lowered when profits drop sharply.
Buckley said too many small businesses can't afford the extensive accounting and legal work needed to convince assessors and state taxation officials to lower their assessed value.
Under the new plan, taxes on owner-occupied, single-family homes could go up no more than 3 percent a year. All other properties would be capped at the average percentage increase over the past 10 years or at 8 percent, whichever was lower. Only Clark County exceeds that 8 percent over the past 10 years. Values there rose some 28 percent this year, and averaged 13.2 percent in the past 10 years.
For small counties with minimal growth or actual drops in assessed valuation, the legislation allows them to increase taxes up to double the rate of inflation. Otherwise, according to fiscal experts, they could be in a situation where their taxes were forced down each year, and they are unable to even maintain services.
Also for small rural counties is a provision saying if their assessed valuation drops by 15 percent or more because of a major mine closure or other event, they can raise the taxes back up again when that mine or business reopens.
The conference committee report is expected to easily win approval from both houses this morning. Buckley joked her only qualms are that it will do so on April Fools' Day, but Senate Majority Leader Bill Raggio, R-Reno, responded that could somehow be appropriate.
n Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.
