Editorial: Tax bill raises questions

Saturday, April 2, 2005 | 9:19 a.m.

WEEKEND EDITION

April 2 - 3, 2005

The ayes carried the day on Friday as the full Senate and the full Assembly voted, at last, on a bill protecting the state's property owners from exorbitant increases in their property taxes. Only one legislator, Assemblywoman Sharron Angle, R-Reno, voted against Assembly Bill 489, which a Senate-Assembly conference committee had approved Thursday night. The bill was flown from Carson City to Las Vegas so Gov. Kenny Guinn could quickly sign it. Legislators had until Thursday to pass the bill, in order to give county assessor offices time to prepare the tax notices that property owners will receive in July. They were a day late.

And, in terms of a quality bill, were they also a dollar short? This is the question now hanging over the Legislature. The bill was necessary because in 2004 the Southern Nevada real estate market became the hottest in the country. Property values rose dramatically -- good news for sellers but bad news for people who planned to stay in their homes. For them, all the sudden boom meant was the frightening prospect of a 30 to 50 percent increase in their taxes. The Legislature had to pass a tax-relief bill or face a citizens' tax revolt.

After eight weeks of back-and-forth on various proposals, the Legislature finally compromised on a bill that caps the property taxes on owner-occupied homes at 3 percent. Property taxes for commercial and most rental properties are taxed at 8 percent, or the percentage of growth their county has experienced over 10 years, whichever is less. A special provision for property being rented at the federally set affordable housing rate allows those owners to qualify for the 3 percent cap.

We supported an across-the-board 6 percent cap, which was proposed last summer by Clark County Assessor Mark Schofield. Will 3 and 8 percent caps raise enough revenue for all of the state's services, including education and public safety? Is it constitutional to distinguish between owner-occupied land and commercial land? These are unanswered questions.

Fortunately, the bill also calls for a legislative committee to look at a long-term solution for property taxes. The committee should begin meeting yesterday.