Democrats’ first plan would ease property tax hikes

Erin Neff

Tuesday, March 11, 2003 | 11:19 a.m.

CARSON CITY -- Assembly Speaker Richard Perkins today proposed a bill that would shift the burden of future property tax increases from homeowners to large property owners.

Perkins' plan would give middle- and lower-income homeowners a tax break under Gov. Kenny Guinn's proposed 16-cent increase in the property tax. The plan would exempt the first $50,000 on the assessed value of a property before any increase is imposed.

The plan is the first official Democratic proposal on taxes, but it is not a comprehensive plan that would raise $1 billion in revenue the way Guinn's does.

If Guinn's proposal is enacted with Perkins' exemption, the increased property tax on a $200,000 home would be about $32. The increased tax on a $2 million business would be about $1,040 and the increased tax on a $2 billion casino would be about $1.1 million.

"I think it places more of our burden on big business and gaming and shields the average taxpayer," Perkins, D-Henderson, said.

Perkins said his plan would exempt 88 percent of the value of single-residential property in the state and 7 percent of the value of commercial property.

The plan supposes that Guinn's property tax increase is included in any tax plan approved by the Legislature. If the increase is included, Perkins said he wanted to make it as fair as possible.

Jeremy Aguero, an economist who worked on the technical details of the Nevada Tax Force on Tax Policy, examined ways to make the state's property tax more fair.

One option the task force considered was splitting the rolls between residential, commercial and industrial. The problem with that idea is that it violated the state's constitution article dealing with uniform and equal taxation.

Implementing such a tax scheme would require an amendment to the constitution, a process that can take five or more years.

Aguero said the Democratic plan is "much more creative."

"That doesn't violate the uniform and equal clause (in the constitution) and it effectively gives the smallest of small business and residents a break," Aguero said.

But Aguero also said the proposal might be difficult to implement across Nevada's 200 different tax districts -- each with different rates for debt service.

Nevada Taxpayer Association President Carole Vilardo said she thought it would be "great to be able to do it." But she cautioned the $50,000 exemption should be to the taxable value, not the appraised value.

Nevada Resort Association lobbyist Greg Ferraro said he has discussed the idea with Perkins and is also familiar with a similar measure under discussion by Sen. Randolph Townsend, R-Reno.

"But we haven't seen any formal information on it and we do not yet have a position on it," Ferraro said. "We also don't know how it would fit in with any other proposals."

Las Vegas Chamber of Commerce Chief Executive Kara Kelley said she wanted to see the details of the proposal before taking a position. However, she did say the idea may not be fair policy.

"Our polling suggests that people want the bigger burden of the tax impact to be on business and gaming," Kelley said. "This doesn't seek to apply fair tax policy by sharing the burden, it just makes it more palatable."

Kelley said the chamber has concerns about splitting the property tax roll because once a residential tax is reduced, she does not believe it will ever be politically safe to raise it again.

"What will be the future burden of the tax?" Kelley asked.

Guinn has consistently said he would consider any alternatives to his tax proposal, provided lawmakers arrive at what is needed to balance the budget.

"The governor's done his job, he's put his idea on the table and it's up to the Legislature now," Guinn spokesman Greg Bortolin said.

Other tax proposals are also being readied for discussion.

On Thursday Sens. Mark Amodei, R-Carson City, and Terry Care, D-Las Vegas, expect to introduce their tax proposal.

"It really is an alternative," Care said this morning.

The Amodei-Care plan, which will be in the form of a 190-page bill, would remove the governor's proposal for a gross receipts tax on business. Their plan would raise the state's room tax and increase the gaming tax at a higher rate than Guinn proposed.