Expert urges cool heads in tax debate

Thursday, Feb. 10, 2005 | 9:41 a.m.

A tax expert urged Clark County School Board members Wednesday to keep cool heads during what's expected to be a heated debate over proposed changes to the state's property tax formula.

Guy Hobbs, of Hobbs, Ong and Associates, told the Clark County School Board that the sharp increase in property value in the Las Vegas Valley is an aberration and that it would be a mistake to over-react.

"The problem isn't the existing formula, it's land values," said Hobbs, who chaired Gov. Kenny Guinn's Task Force on Tax Policy in 2003 and 2003. "The solution should be matched to the problem."

The existing tax formula has been both predictable and stable, Hobbs said, allowing public entities such as the school district to budget accordingly because of the relative certainty of its share of revenue.

One proposed solution, which would require a constitutional amendment, would be a "split-roll" tax, where homeowners whose property is their primary residence would be taxed less than out-of-state investors speculating on the real estate market. Those "out-of-towners" have contributed to the rapid inflation of property value, Hobbs said.

"Other states tax vacation properties and second residences at a different rate and it's been successful to some degree," Hobbs said. "The process would need to be transparent ... people would need to know from the outset that the varying tax rates would apply."

As they are being wooed by a variety of lawmakers and special-interest groups all pushing their own versions of a silver bullet, School Board members must consider the impact of the proposed changes once the real estate market levels off.

"You don't want to marry yourself to a constitutional amendment that precludes you from making necessary adjustments down the line," Hobbs said.

School Board President Larry Mason praised Hobbs' presentation, which he said would help both him and his colleagues navigate public discussion.

"It wasn't a bit boring," Mason told Hobbs, drawing laughs.