Tuesday, March 4, 2003 | 11:21 a.m.
Despite continuing economic troubles for some of Clark County's hotels, property tax collections should be up by more than $115 million this year, the county's tax assessor is predicting.
The county Board of Equalization, an independent board appointed by the Clark County Commission, is wrapping up appeals from 775 property owners throughout the county, including properties located in the cities of the Las Vegas Valley. The number of appeals is down slightly. The board handled 780 appeals last year, and that's one indicator of an uptick in the local economy, Assessor Mark Schofield said.
Schofield's office is predicting $1.206 billion in tax revenue for state, county, city and other government coffers for the fiscal year that begins July 1, up from $1.089 billion this year.
That's about a 9 percent increase in revenue. Increases in the past three years have ranged from 11 percent to 12.5 percent. The property tax is roughly split up in thirds going to local governments, the state and various special tax districts such as the library system.
Gov. Kenny Guinn's budget proposal forecasts increases oin property tax revenues of 10.1 percent next year and 9.2 percent the following year.
Most of that increase reflects the fact that despite hard times for some industries, Clark County continues to attract new business, investors and property owners.
"I'm taking a positive attitude," despite pressures from soaring gasoline prices, Indian gaming and a stagnant national economy, he said.
The economic growth reflects the relative strength of Las Vegas, Schofield said.
"Las Vegas, being probably the most fabulous destination in the world, it would take other destinations decades to catch up with us," he said.
Not all properties have shared in the growth. Some property owners sought and received property tax reductions from the assessor's office or the Board of Equalization.
Of the 775 appeals filed with the board, 26 came from casinos. Most sought reductions in their property-tax assessments, a value that ultimately is reflected in their tax bills.
The largest reduction request came from the financially troubled Aladdin, the 2,600-room Strip property in bankruptcy. The assessor's office put an initial value of $613 million on the property in December.
The office and the hotel later agreed to cut that figure by almost $274 million after a re-appraisal. Schofield and his staff said that in this case, as in many other cases involving casinos, economic factors have clearly impacted the value of the properties.
Rocky Steele, assistant director of assessment services, noted that the Aladdin, which has struggled for years but in recent months has posted a positive cash-flow, will still pay taxes on $33 million of value over what it paid this year. The total value of the property was pegged at $339 million. That compares with $305 million last year.
Economic factors affect the valuation of business properties in the state of Nevada, Steele said. The other factors included in the final value set by the county and state include a property's replacement cost, the value of the land beneath a property and all of the improvements that go into a property.
Steele noted that the Aladdin case did not involve a dispute between his office and the property owners. That is not always the case.
Another hotel hit by the economic downturn was the Las Vegas Hilton, which appealed the December valuation notice of $311 million, up more than $100 million from the year before. The board put the figure at $141 million, $69 million less than this year and almost $170 million less than the number recommended by the assessor's staff.
The Hilton was one of five big resorts for which the board lowered the property-tax bite against the recommended appraisals from the assessor's office. Often the assessor's staff and the property owners agree on the number. On the Hilton and the other four, they did not.
The others were:
In all cases, both the assessor's office and the property owners that appealed can take their cases to the state Board of Equalization for a higher ruling. Deputy Assessor Richard Stewart declined to identify which properties, but he said his office can make a strong case to the state board on several of the disputed cases.
The hotels and every other property owner in the county pays a property tax bill that is on average about 1 percent of the total value of the property, so the Aladdin's successful appeal would shave about $2.7 million off their tax costs.
All appeals in the county have cut about $15 million from collections next year, Stewart said. Of the 26 big hotels that filed appeals, their total savings will come to about $9.5 million.
Their combined property tax bill will be about $2.1 million less than last year's, according to the office.
The county coffers
When split between the state and the various jurisdictions that receive a slice of the property-tax pie, government agencies do not live or die by decisions on individual appeals. Clark County Finance Department officials say they basically trust the assessor's staff and Board of Equalization to follow the law and come up with an appropriate value for property.
But the appeals can affect revenue, said Susan Laveway, assistant county finance director.
"If there is a large adjustment, we are made aware of it," she said.
While the tax bill can be a huge issue for an individual property owner, property taxes overall provide about 20 percent of the county's income, so one case or even a batch of cases will not make or break the county, she said.
Laveway said that as the numbers from the appeals process come in, staff in finance use them to revise their tentative budget for the coming year, which should be prepared by April 15.
But the picture is at least somewhat positive for the cash-strapped county, she said.
"We anticipated $163 million is fiscal year 2002, Laveway said. "What actually came in was about $166 million.
"As far as what were estimating this year, we have a budget of $188 million," she said -- although the Finance Department is still crunching the numbers as they come in.
The losing battles
Many property owners who appeal their bills, including hundreds of single-family homeowners, are not granted reductions by the board. One of those who appealed and lost was the Howard Hughes Corp., which disputed the property values placed by the assessor's office on unimproved property in Summerlin.
The corporation sought to trim $121 million in assessed value for its properties on the west side of Summerlin, a project still under development. But the assessor's staff stuck by its initial valuation of $280 million for the 3,800 acres in dispute, and the board backed up the staff.
Board member and former Public Administrator Jared Shafer took the Hughes Corp. representatives to task for the 50 pages of documentation that the company provided in its appeal.
"I think you went to the old standby," Shafer said. "'Baffle them with b.s.' "
Shafer said that, if anything, the assessor's figure was a low-ball figure and could be increased.
"You can't win this vote with me," he told the team from the Hughes Corp.
Charles Jack, a certified appraiser, represented the company before the board. He said the appraisers from the assessor's office failed to take into account a number of factors that should have reduced the value of the 3,800 acres.
But Kathleen Nylen, a board member and a Las Vegas businesswoman with extensive background in real estate, said she believed the Hughes Corp. estimate of $10,000 to $25,000 an acre for the property on the west side of Summerlin was well short of the mark. However, she also said the board could use more time to study Hughes Corp.'s appeal.
"I feel frustrated that there was not more time to analyze this better," she said.
Board Chairman James W. Howard agreed, saying the appeal "requires a week's worth of analysis."
Ultimately, the board voted 5-0 to reject the Hughes Corp. appeal. As in all cases, Howard told the team from Hughes Corp. that they can take the case at least one step further.
"You can appeal this to the state Board of Equalization," he said.
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