Wednesday, July 21, 2004 | 11:04 a.m.
The Clark County assessor warned Tuesday of a taxpayers' rebellion unless local governments and citizens successfully pressure the Nevada Legislature to put a cap on property taxes.
Assessor Mark Schofield asked for support from the Clark County Commission for his proposal to ask the Legislature to cap property tax increases at 6 percent.
The commission responded with qualified support -- it endorsed Schofield's ongoing efforts, but would not pass a resolution explicitly supporting the 6 percent cap until it gets more information on property values and taxes later this year.
Schofield said the annual rises in property taxes and values, estimated at about 8 percent for a typical homeowner in the bills now arriving to homeowners throughout the county and state, could jump much higher within the next several years. A house that has doubled in value because of the area's hot real estate market would see a corresponding increase in property taxes, a change that could hit homeowners for thousands of dollars more than they now pay.
He said that within two years, homeowners could see property taxes increasing by 50 percent or more above their current payments.
"I never anticipated this issue to explode the way that it has in the short period it has," Schofield told the commission. "It's going to be a very volatile issue if we don't do something about it.
"This is something that is extraordinary as it relates to my 30 years of experience in the assessor's office. This will make the Boston Tea Party look like a Sunday brunch, and if there is not a cap, you're going to see a revolution that will begin in this county that will dwarf what happened in California."
Schofield was referring to a property tax measure in the 1970s called Proposition 13, which capped property taxes and dramatically shifted the tax structure and, as a result, government budgets.
Schofield warned that any taxpayer backlash could hit local governments and the Clark County School District hard. One proposal for a 2 percent cap, based on Proposition 13 and tied to the property values set in 2001-2002, already came close to going on the November ballot, he said.
The proposed initiative backed by Assembly members Sharron Angle, R-Reno, and Don Gustavson, R-Sun Valley, failed to qualify for the ballot by just 5,700 signatures, Schofield said, despite starting the effort in May, very late in the initiative season.
Schofield said the 2 percent proposal would be a blow to local governments.
"It creates a tremendous inequity as it relates to the assessment of property," he said, because it would freeze the property value of a home until it was sold. One house might be paying the 2002 tax rate, while a recently purchased home next door would pay much higher contemporary tax rates, Schofield said.
Schofield and many other observers do not see California's landmark Proposition 13, passed in 1978, as a success.
"It hasn't worked for California," he said. "All the revenue was lost and was made up for by an increase in users' fees."
Another advantage for the 6 percent cap is that it could be enacted within a year, unlike a constitutional amendment such as the Angle-Gustavson proposal, which could take years, Schofield said.
He said the 6 percent cap would ensure a steady stream of government income while mitigating the impacts to young families and older homeowners, many of whom are on fixed incomes. The 6 percent cap would not cover new construction and improvements to existing properties, Schofield noted.
Schofield, a former Clark County School District board member, noted that the district receives half of its funding from property taxes, and would take an especially heavy hit if the tax rate were drastically cut. The 6 percent cap would avoid that result, he said.
"It would hold local governments harmless, it would hold the school district harmless and it would hold the public harmless from this gargantuan tax increase we will experience by July of 2005," Schofield said.
Voters in 1998 approved a 10-year freeze on property taxes, guaranteeing the school district a minimum of $2.5 billion toward a capital improvement plan to build 88 new schools and replace aging campuses.
Sharp increases in property values have given the district an extra $200 million in proceeds from bond sales -- money school officials say is an important cushion against rising costs of construction materials and possible future economic downturns.
Walt Rulffes, deputy superintendent of operations for the district, was out of town and could not be reached for comment on the effect the proposed cap might have on school construction.
Schofield told the commission that the final cap could be greater or lower than the one he is backing, but a bipartisan consensus appears to be developing in the Legislature. He said Sen. Ann O'Connell, R-Las Vegas, and Sen. Mark Amodei, R-Carson City, have indicated their support. The recent public call for a similar cap from Sen. Dina Titus, D-Las Vegas and Assembly Speaker Richard Perkins, D-Henderson, indicate broad support, Schofield said.
The 6 percent cap also has opposition, Schofield said. Some believe that the property-tax cap should be tied to the increases in the Consumer Price Index, which are running at about 3.5 percent for the West. The problem there, Schofield said, because the index actually varies from county to county while the state law says the property tax law has to be consistent throughout the state.
Other opponents simply believe the cap should be lower, in some cases much lower, Schofield said.
"That will be a political discussion that will take place at the Nevada Legislature," he said. Schofield also noted that some local government officials, whom he declined to identify, "suggested basically: Why couldn't Schofield keep his mouth shut?"
That would have allowed those governments to reap the benefits of the property value increases, at least until the Legislature overturned the existing tax rates.
Commissioners supported Schofield's efforts, although they came short of endorsing the 6 percent cap.
"I appreciate the presentation from Mr. Schofield," Commissioner Bruce Woodbury said. "I think you got out ahead on an issue that needs to be addressed. We should also indicate our support of Mr. Schofield's effort to come up with a reasonable bill draft request to mitigate what would otherwise be an extraordinary property tax increase."
Commissioner Lynette Boggs McDonald said she wants to see a full financial analysis before she is ready to endorse a particular cap on tax-percentage increases.
"There needs to be some bar established," Boggs McDonald said. "I need to have a lot more information before I can say 6 percent, or 4 percent or 6.25 percent is the right number."
She said a central concern is how any cap would ultimately affect local governments, particularly the school district. Breaking from some of her Republican Party brethren, Boggs McDonald does not like a Proposition 13-style solution.
"I think the California cap had some significant flaws," she said. "It may have capped property taxes, but fees went through the roof. I'd hate to see that here."
Commissioner Mary Kincaid-Chauncey said the property tax increases would not just hit homeowners. Business will have to charge more for their goods and services to help cover the increased taxes, and rents in apartment complexes will have to go up also, she said.
The commission voted to endorse the efforts with a 7-0 vote, but the board also asked for confirmation of the property values and tax increases before formally endorsing the 6 percent cap. Schofield said later those confirmed numbers should be ready for the commission before the end of this calendar year.
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