Columnist Jon Ralston: Tax issue demands creativity

Friday, Nov. 19, 2004 | 4:52 a.m.

Jon Ralston hosts the news discussion program Face to Face on Las Vegas ONE and publishes the Ralston Report. He can be reached at (702) 870-7997 or at ralston@vegas.com.

WEEKEND EDITION

November 20 - 21, 2004

As Kathy Augustine and her PR/legal team try to transmogrify the controller from horrible harridan to damsel in distress, another set of supposed victims is begging the Gang of 63 for mercy.

The public and state lawmakers really don't give a whit about poor, poor pitiful Augustine. But like some state senators whose only concern in the impeachment proceeding is the political consequences for themselves, Southern Nevadans, too, care mostly about their own bottom lines.

As they yawn about Augustine's fate, residents are mad as hell about their property tax bills and they are not going to take it anymore. And so, amid threats of a revolt and electoral carnage, the Gang of 63 is poised to act -- probably precipitously and probably thoughtlessly.

Beyond the knee-jerk mentality and genuflection to caprices of the moment that this property tax brouhaha epitomizes, it also is a microcosm of the debate over the price of growth in the valley and who should pay for it. This issue will dominate Southern Nevada politics -- and thus state politics -- for at least another decade as elected officials try to balance an infrastructure stressed by growth and a restive, increasingly cantankerous populace unwilling to pay for it.

I have sympathy -- really, I do -- for the politicians confronted with a popular uprising. They have to react to constituents with pitchforks lest they be skewered. But the extent of the reaction -- to cap or not to cap, how high to cap, what kind of cap -- will determine whether the Law of Unintended Consequences results in more deleterious effects to the economy.

You already have folks, led by Assemblywoman Sharron Angle, R-Mesozoic Era, who want to turn the clocks back with a Prop 13-type rollback that will have an impact on services delivered by schools and local governments. And the demagogic pandering to the Least Common Denominator on an issue like this, including the further abuse of the initiative process for an issue that government should deal with directly, is not cause for optimism.

I understand why people are angry, too. They see their assessed values skyrocketing and fret about their taxes doing the same, albeit with no regard to the salutary effects of higher home values and their personal responsibility to pay more to ensure growth pays more for growth.

Granted, there are folks who cannot pay the large tax bills without affecting the quality of their lives -- certain demographic groups will be disproportionately affected and should be placated by lawmakers.

But why is it that so many of those featured in news stories mewling about their assessed values or putting fingers to computer keyboards to write screeds-to-the- editor seem to be the old folks whose pull-up-the-drawbridge and we-won't-pay-a- dime-for-anything mentality threaten the economic vitality of the valley?

Many people have come to live here and done nothing to create the astronomical value that their homes now have and happily benefit from the economy created by others. Serendipity has brought them houses worth two or three times more than when they were purchased. They want all of that unearned equity but think someone else -- casinos, developers, anyone else who has helped this valley become an economic dynamo -- should pay their tax bill.

Caught in the middle of the maelstrom are state lawmakers and local officials who cannot ignore -- hard as they might try -- certain ineluctable facts.

Fact: Nevada's property tax rates are relatively low -- a tax task force found a couple of years ago that residential (33rd) and commercial (49th) tax rates were well below the national average among states. So just cutting rates will not work, especially since so much already is encumbered by commitments to those who need the revenue most: the schools.

Fact: Capping rates at any level -- whether at Assessor Mark Schofield's 6 percent or lower -- is not a panacea but an ephemeral and thin fix for a long-term, deep problem. Local governments should be fine and the schools will continue to struggle at that level. But in the long run, as the growth continues, the constitutional mandate for uniform and equal taxation, as opposed to a split roll or one with exemptions or allowances, becomes more onerous.

Fact: The revolution is real and some action must be taken. Lawmakers are being inundated with e-mails and phone calls demanding relief. To do nothing would be political suicide. But to do the wrong thing could be economic suicide. They will need to pass a cap, but perhaps one with a sunset as the constitutional changes take time to go into effect.

It may be too much to expect the governor and the Gang of 63 be creative and think long range in crafting a policy that will not be enacted in a vacuum and will affect every government in Nevada as well as other tax debates, including the coming one over sales taxes for cops.

But if Augustine and her team can turn ugly into beautiful, which no one would have thought possible a few weeks ago, then perhaps we should believe in the unbelievable when it comes to property taxes, too: Maybe the Gang of 63 will shuck the superficial rhetoric and solutions and opt for an enlightening colloquy about property taxes and the costs of growth.

If Kathy Augustine, who acknowledged willfully breaking state laws thrice, can be seen as a victim, then I choose to believe anything, even thoughtful legislative deliberation, is possible.

archive